ATLANTA, Oct. 13, 2020 /PRNewswire/ -- Delta Air Lines
(NYSE:DAL) today reported financial results for the September
quarter 2020. Detailed results, including both GAAP and
adjusted metrics, are on page four and are incorporated here.
"While our September quarter results demonstrate the magnitude
of the pandemic on our business, we have been encouraged as
more customers travel and we are seeing a path of progressive
improvement in our revenues, financial results and daily cash
burn," said Ed Bastian, Delta's
chief executive officer. "The actions we are taking now to
take care of our people, simplify our fleet, improve the customer
experience, and strengthen our brand will allow Delta to accelerate
into a post-COVID recovery."
September Quarter Financial Results
- Adjusted pre-tax loss of $2.6
billion excludes $4.0 billion
of items directly related to the impact of COVID-19 and the
company's response, including fleet-related restructuring charges
and charges for voluntary separation and early retirement programs
for Delta employees, which were partially offset by the benefit of
the CARES Act grant recognized in the quarter
- Total adjusted revenue of $2.6
billion declined 79 percent on 63 percent lower capacity
versus prior year
- Total operating expense, which includes the $4.0 billion of COVID-related items described
above, decreased $1.0 billion over
prior year. Adjusted for those items and third-party refinery
sales, total operating expense decreased $5.5 billion or 52 percent in the September
quarter compared to the prior year, driven by lower capacity- and
revenue-related expenses and strong cost management in the
business
- At the end of the September quarter, the company had
$21.6 billion in liquidity
- During the September quarter cash burn (see Note A) averaged
$24 million per day, and $18 million per day for the month of
September
Revenue Environment
Delta's adjusted operating revenue of $2.6 billion for the September quarter was down
79 percent versus the September 2019
quarter as demand for air travel remains under significant
pressure. Passenger revenues declined 83 percent on 63
percent lower capacity. Non-ticket revenue streams have
performed relatively better than passenger revenues, with total
loyalty revenues declining 60 percent and cargo declining 25
percent.
"With a slow and steady build in demand, we are restoring flying
to meet our customers' needs, while staying nimble with our
capacity in light of COVID-19," said Glen
Hauenstein, Delta's president. "While it may be two
years or more until we see a normalized revenue environment, by
restoring customer confidence in travel and building customer
loyalty now, we are creating the foundation for sustainable future
revenue growth."
Setting the Foundation for Recovery
Delta has taken a number of actions to position the company to
accelerate into a post-COVID recovery:
Taking great care of Delta people
- Through the voluntary separation and early retirement programs,
voluntary unpaid leaves, job sharing and other initiatives, the
company has been able to avoid involuntary furloughs for ground and
flight attendant employees
- Launching a "Stop the Spread. Save Lives." campaign to
emphasize the six core health actions that protect Delta employees
against COVID-19, including wearing masks, social distancing,
testing and getting a flu shot. Delta is providing no-cost COVID-19
testing and flu shots for its U.S. employees
Improving the customer experience
- Emphasizing health and safety with the Delta CareStandard, a
multi-layered approach that includes intense cleaning protocols,
blocking middle seats and requiring masks onboard all aircraft
- Reducing complexity for customers by eliminating change fees
for nearly all domestic fares and redeposit/reissuance fees on
domestic reward tickets for SkyMiles Members
- Taking a customer-centric approach to refunds, with
approximately $2.8 billion returned
to customers year-to-date
Simplifying the fleet
- Restructuring its Airbus and CRJ aircraft order books to better
match the timing of aircraft deliveries with network and financial
needs over the next several years. The restructuring reduces
aircraft purchase commitments by more than $2 billion in 2020 and by more than $5 billion through 2022
- Accelerating its fleet simplification strategy, which is
intended to modernize and streamline the company's fleet, enhance
the customer experience and generate cost savings. The company has
announced plans to accelerate retirements of nearly 400 aircraft by
2025, including more than 200 in 2020
Fleet
Type
|
Number of
Aircraft
|
Estimated Final
Retirement
During the Quarter Ended
|
MD-90
|
26
|
June 2020
|
767-300ER
|
7
|
June 2020
|
A320
|
10
|
June 2020
|
MD-88
|
47
|
June 2020
|
737-700
|
10
|
September
2020
|
777
|
18
|
December
2020
|
CRJ-200
|
125
|
December
2023
|
717
|
91
|
December
2025
|
767-300ER
|
49
|
December
2025
|
Total
|
383
|
|
Cost Performance
Total adjusted operating expense for the September quarter
decreased $5.5 billion or 52 percent
versus the prior year quarter excluding $3.1
billion in charges related to the voluntary separation and
early retirement programs for employees, $2.2 billion in restructuring charges from
fleet-related decisions, and a $1.3
billion CARES Act benefit. This performance was driven
by a $1.8 billion or 78 percent
reduction in fuel expense, a 75 percent reduction in maintenance
expense from parking or retiring nearly 40 percent of mainline
aircraft and lower volume- and revenue-related expenses.
Salaries and benefits expense was down 32 percent as a result
of approximately 18,000 employees electing to depart the company in
addition to benefits from voluntary unpaid leaves, work hour
reductions and other initiatives.
Non-operating expense for the quarter was $349 million higher versus the prior year
quarter, driven primarily by $221
million in higher interest expense from increased debt
levels the company has incurred during the COVID-19 pandemic.
"Our results this quarter were underpinned by a strong focus on
costs, as we reduced adjusted operating expenses by more than 50
percent, similar to the June quarter, despite flying 23 points more
capacity," said Paul Jacobson,
Delta's chief financial officer. "That cost focus allowed the
increase we've seen in net sales to flow directly into an
improvement in our daily cash burn, which improved from
$27 million per day in June to
$18 million per day in
September."
Balance Sheet, Cash and Liquidity
Delta ended the September quarter with $21.6 billion in liquidity. Cash used in
operations during the quarter was $2.6
billion. Daily cash burn averaged $24 million for the quarter, with an average of
$18 million for the month of
September.
At the end of the September quarter, the company had total debt
and finance lease obligations of $34.9
billion with adjusted net debt of $17.0 billion, $6.5
billion higher than December 31,
2019. In September, Delta completed the largest debt
offering in aviation history, raising $9.0
billion at a blended average rate of 4.75 percent secured by
its SkyMiles loyalty program. In addition, the company
borrowed $1.5 billion at a blended
yield of 4.4 percent in connection with the issuance of tax-exempt
bonds, that will be used to finance the LaGuardia airport project.
The company's total debt had a weighted average interest rate
of 4.3 percent at September 30,
2020.
Subsequent to the end of the quarter, the company repaid the
$3 billion, 364-day term loan that it
entered into in March, increasing its unencumbered asset base to
$9 to $10
billion of aircraft, engines and spare parts and reducing
remaining debt amortization and maturities to $2.3 billion through the end of 2021. The
company also repaid $2.6 billion
under its revolving credit facilities drawn down in March 2020.
At the end of the September quarter, the company's Air Traffic
Liability stood at $4.6 billion,
including a current liability of $4.4
billion and a non-current liability of $0.2 billion. The non-current liability
represents the current estimate of tickets to be flown, as well as
credits to be used, beyond one year. Travel credits represent
approximately 60 percent of the Air Traffic Liability at the end of
the September quarter.
CARES Act Accounting, Fleet Restructuring and Voluntary
Separation and Early Retirement Program Charges
In the September quarter, the company received $701 million under the payroll support program
(PSP) of the CARES Act, consisting of $491
million in additional grant funds and a $210 million increase in the low-interest,
unsecured 10-year loan. The September quarter amount includes
an incremental $157 million beyond
the initial $5.4 billion Delta was
allocated in April 2020. In the
September quarter, approximately $1.3
billion of the grant was recognized as a contra-expense,
which is reflected as "CARES Act grant recognition" on the
Consolidated Statements of Operations. The company expects to
use the remaining proceeds from the PSP by the end of 2020.
During the September quarter, the company made the decision to
retire its 717-200 fleet and the remainder of its 767-300ER fleet
by 2025 and its CRJ-200 fleet by 2023. As a result of these
decisions, the company recorded $2.2
billion in fleet-related charges, which are reflected in
"Restructuring charges" on the Consolidated Statement of
Operations.
The company offered voluntary separation and early retirement
programs to employees during the September quarter.
Approximately 18,000 employees participated in the programs,
with most leaving the company August
1, resulting in a $3.1 billion
restructuring charge in the September quarter, which is reflected
in "Restructuring charges" on the Consolidated Statement of
Operations. Cash payments in connection with these programs
totaled $813 million in the September
quarter, and these payments are excluded from daily cash burn
figures. The company anticipates an additional $150 to $250
million in cash payments in the December quarter,
$600 million in 2021 and the
remaining payments in 2022 and beyond.
September Quarter Results
September quarter results have been adjusted primarily for the
CARES Act grant recognition and restructuring charges described
above.
|
GAAP
|
$
Change
|
%
Change
|
($ in millions except
per share and unit costs)
|
3Q20
|
3Q19
|
Pre-tax
(loss)/income
|
(6,859)
|
|
1,947
|
|
(8,806)
|
|
NM
|
Net
(loss)/income
|
(5,379)
|
|
1,495
|
|
(6,874)
|
|
NM
|
Diluted
(loss)/earnings per share
|
(8.47)
|
|
2.31
|
|
(10.78)
|
|
NM
|
Operating
revenue
|
3,062
|
|
12,560
|
|
(9,498)
|
|
(76)
|
%
|
Operating
expense
|
9,448
|
|
10,489
|
|
(1,041)
|
|
(10)
|
%
|
Fuel
expense
|
486
|
|
2,239
|
|
(1,753)
|
|
(78)
|
%
|
Non-operating
expense
|
473
|
|
124
|
|
349
|
|
NM
|
Total debt and
finance lease obligations
|
34,870
|
|
10,119
|
|
24,751
|
|
NM
|
Total revenue per
available seat mile (TRASM)
|
10.82
|
|
16.58
|
|
(5.76)
|
|
(35)
|
%
|
Consolidated unit
cost (CASM)
|
33.40
|
|
13.85
|
|
19.55
|
|
NM
|
Average fuel price
per gallon
|
1.25
|
|
1.94
|
|
(0.69)
|
|
(36)
|
%
|
|
|
Adjusted
|
$
Change
|
%
Change
|
($ in millions except
per share and unit costs)
|
3Q20
|
3Q19
|
Pre-tax
(loss)/income
|
(2,589)
|
|
1,968
|
|
(4,557)
|
|
NM
|
Net
(loss)/income
|
(2,096)
|
|
1,507
|
|
(3,603)
|
|
NM
|
Diluted
(loss)/earnings per share
|
(3.30)
|
|
2.33
|
|
(5.63)
|
|
NM
|
Operating
revenue
|
2,645
|
|
12,507
|
|
(9,861)
|
|
(79)
|
%
|
Operating
expense
|
5,004
|
|
10,460
|
|
(5,455)
|
|
(52)
|
%
|
Fuel
expense
|
489
|
|
2,257
|
|
(1,768)
|
|
(78)
|
%
|
Non-operating
expense
|
230
|
|
79
|
|
151
|
|
NM
|
Adjusted net
debt
|
17,012
|
|
10,265
|
|
6,747
|
|
66
|
%
|
Total revenue per
available seat mile (TRASM, adjusted)
|
9.35
|
|
16.51
|
|
(7.16)
|
|
(43)
|
%
|
Consolidated unit
cost (CASM-Ex)
|
15.96
|
|
10.15
|
|
5.81
|
|
57
|
%
|
Average fuel price
per gallon
|
1.25
|
|
1.96
|
|
(0.71)
|
|
(36)
|
%
|
About Delta Air Lines Delta Air Lines
(NYSE: DAL) is the U.S. global airline leader in safety,
innovation, reliability and customer experience. Powered by our
employees around the world, Delta has for a decade led the airline
industry in operational excellence while maintaining our reputation
for award-winning customer service.
Today, and always, nothing is more important than the health
and safety of our customers and employees. Since the onset of the
COVID-19 pandemic, Delta has moved quickly to transform the
industry standard of clean while offering customers more space
across the travel journey. These and numerous other layers of
protection ensure a safe and comfortable travel experience for our
customers and employees.
With our mission of connecting the people and cultures of the
globe, Delta strives to foster understanding across a diverse world
and serve as a force for social good.
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. Risks
and uncertainties that could cause differences between actual
results and forward-looking statements include, but are not limited
to, the material adverse effect that the COVID-19 pandemic is
having on our business; the impact of incurring significant debt in
response to the pandemic; 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 performance of our significant investments in and
commercial relationships with, airlines in other parts of the
world; failure to comply with the financial and other covenants in
our financing agreements; 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; the
cost of aircraft fuel; the availability of aircraft fuel; failure
or inability of insurance to cover a significant liability at
Monroe's Trainer refinery; the
impact of environmental regulation on the Trainer refinery,
including costs related to renewable fuel standard regulations; our
ability to retain senior management and key employees; damage to
our reputation and brand if we are exposed to significant adverse
publicity; the effects of terrorist attacks or geopolitical
conflict; competitive conditions in the airline industry;
interruptions or disruptions in service at major airports at which
we operate; the effects of extensive government regulation on our
business; the impact of environmental regulation on our business;
the sensitivity of the airline industry to prolonged periods of
stagnant or weak economic conditions; and uncertainty in economic
conditions and regulatory environment in the United Kingdom related to the exit of the
United Kingdom from the European
Union.
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, 2019 and our
Quarterly Report on Form 10-Q for the quarterly period ended
June 30, 2020. Caution should be
taken not to place undue reliance on our forward-looking
statements, which represent our views only as of October 13, 2020, and which we have no current
intention 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)
|
2020
|
2019
|
$
Change
|
%
Change
|
|
2020
|
2019
|
$
Change
|
%
Change
|
Operating
Revenue:
|
|
|
|
|
|
|
|
|
|
Passenger
|
$
|
1,938
|
|
$
|
11,410
|
|
$
|
(9,472)
|
|
(83)
|
%
|
|
$
|
10,185
|
|
$
|
32,032
|
|
$
|
(21,847)
|
|
(68)
|
%
|
Cargo
|
142
|
|
189
|
|
(47)
|
|
(25)
|
%
|
|
403
|
|
567
|
|
(164)
|
|
(29)
|
%
|
Other
|
982
|
|
961
|
|
21
|
|
2
|
%
|
|
2,534
|
|
2,969
|
|
(435)
|
|
(15)
|
%
|
Total operating
revenue
|
3,062
|
|
12,560
|
|
(9,498)
|
|
(76)
|
%
|
|
13,122
|
|
35,568
|
|
(22,446)
|
|
(63)
|
%
|
|
|
|
|
|
|
|
|
|
|
Operating
Expense:
|
|
|
|
|
|
|
|
|
|
Salaries and related
costs
|
1,956
|
|
2,884
|
|
(928)
|
|
(32)
|
%
|
|
6,814
|
|
8,275
|
|
(1,461)
|
|
(18)
|
%
|
Aircraft fuel and
related taxes
|
486
|
|
2,239
|
|
(1,753)
|
|
(78)
|
%
|
|
2,453
|
|
6,508
|
|
(4,055)
|
|
(62)
|
%
|
Regional carriers
expense, excluding fuel
|
488
|
|
900
|
|
(412)
|
|
(46)
|
%
|
|
1,888
|
|
2,698
|
|
(810)
|
|
(30)
|
%
|
Depreciation and
amortization
|
545
|
|
631
|
|
(86)
|
|
(14)
|
%
|
|
1,813
|
|
1,960
|
|
(147)
|
|
(8)
|
%
|
Contracted
services
|
379
|
|
685
|
|
(306)
|
|
(45)
|
%
|
|
1,398
|
|
1,974
|
|
(576)
|
|
(29)
|
%
|
Landing fees and other
rents
|
378
|
|
460
|
|
(82)
|
|
(18)
|
%
|
|
1,195
|
|
1,321
|
|
(126)
|
|
(10)
|
%
|
Ancillary businesses
and refinery
|
561
|
|
279
|
|
282
|
|
NM
|
|
|
1,181
|
|
945
|
|
236
|
|
25
|
%
|
Aircraft maintenance
materials and outside repairs
|
106
|
|
424
|
|
(318)
|
|
(75)
|
%
|
|
618
|
|
1,334
|
|
(716)
|
|
(54)
|
%
|
Passenger commissions
and other selling expenses
|
94
|
|
539
|
|
(445)
|
|
(83)
|
%
|
|
498
|
|
1,505
|
|
(1,007)
|
|
(67)
|
%
|
Passenger
service
|
88
|
|
345
|
|
(257)
|
|
(74)
|
%
|
|
433
|
|
938
|
|
(505)
|
|
(54)
|
%
|
Aircraft
rent
|
99
|
|
110
|
|
(11)
|
|
(10)
|
%
|
|
295
|
|
318
|
|
(23)
|
|
(7)
|
%
|
Restructuring
charges
|
5,345
|
|
—
|
|
5,345
|
|
NM
|
|
|
7,798
|
|
—
|
|
7,798
|
|
NM
|
|
CARES Act grant
recognition
|
(1,315)
|
|
—
|
|
(1,315)
|
|
NM
|
|
|
(2,595)
|
|
—
|
|
(2,595)
|
|
NM
|
|
Profit
sharing
|
—
|
|
517
|
|
(517)
|
|
(100)
|
%
|
|
—
|
|
1,256
|
|
(1,256)
|
|
(100)
|
%
|
Other
|
238
|
|
476
|
|
(238)
|
|
(50)
|
%
|
|
944
|
|
1,317
|
|
(373)
|
|
(28)
|
%
|
Total operating
expense
|
9,448
|
|
10,489
|
|
(1,041)
|
|
(10)
|
%
|
|
24,733
|
|
30,349
|
|
(5,616)
|
|
(19)
|
%
|
|
|
|
|
|
|
|
|
|
|
Operating
(Loss)/Income
|
(6,386)
|
|
2,071
|
|
(8,457)
|
|
NM
|
|
|
(11,611)
|
|
5,219
|
|
(16,830)
|
|
NM
|
|
|
|
|
|
|
|
|
|
|
|
Non-Operating
Expense:
|
|
|
|
|
|
|
|
|
|
Interest expense,
net
|
(291)
|
|
(70)
|
|
(221)
|
|
NM
|
|
|
(564)
|
|
(228)
|
|
(336)
|
|
NM
|
|
Impairments and equity
method (losses)/gains
|
(114)
|
|
27
|
|
(141)
|
|
NM
|
|
|
(2,432)
|
|
(44)
|
|
(2,388)
|
|
NM
|
|
Gain/(loss) on
investments, net
|
(95)
|
|
(35)
|
|
(60)
|
|
NM
|
|
|
(199)
|
|
(17)
|
|
(182)
|
|
NM
|
|
Miscellaneous,
net
|
27
|
|
(46)
|
|
73
|
|
NM
|
|
|
327
|
|
(130)
|
|
457
|
|
NM
|
|
Total non-operating
expense, net
|
(473)
|
|
(124)
|
|
(349)
|
|
NM
|
|
|
(2,868)
|
|
(419)
|
|
(2,449)
|
|
NM
|
|
|
|
|
|
|
|
|
|
|
|
|
(Loss)/Income
Before Income Taxes
|
(6,859)
|
|
1,947
|
|
(8,806)
|
|
NM
|
|
|
(14,479)
|
|
4,800
|
|
(19,279)
|
|
NM
|
|
|
|
|
|
|
|
|
|
|
|
Income Tax
Benefit/(Provision)
|
1,480
|
|
(452)
|
|
1,932
|
|
NM
|
|
|
2,849
|
|
(1,131)
|
|
3,980
|
|
NM
|
|
|
|
|
|
|
|
|
|
|
|
Net
(Loss)/Income
|
(5,379)
|
|
1,495
|
|
(6,874)
|
|
NM
|
|
|
(11,630)
|
|
3,669
|
|
(15,299)
|
|
NM
|
|
|
|
|
|
|
|
|
|
|
|
Basic
(Loss)/Earnings Per Share
|
$
|
(8.47)
|
|
$
|
2.32
|
|
|
|
|
$
|
(18.30)
|
|
$
|
5.61
|
|
|
|
Diluted
(Loss)/Earnings Per Share
|
$
|
(8.47)
|
|
$
|
2.31
|
|
|
|
|
$
|
(18.30)
|
|
$
|
5.59
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic Weighted
Average Shares Outstanding
|
635
|
|
646
|
|
|
|
|
636
|
|
654
|
|
|
|
Diluted Weighted
Average Shares Outstanding
|
635
|
|
648
|
|
|
|
|
636
|
|
656
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
DELTA AIR LINES,
INC.
|
Passenger
Revenue
|
(Unaudited)
|
|
|
|
|
|
|
|
|
|
|
Three Months
Ended
|
|
|
|
Nine Months
Ended
|
|
|
|
September
30,
|
|
|
|
September
30,
|
|
|
(in
millions)
|
2020
|
2019
|
$
Change
|
%
Change
|
|
2020
|
2019
|
$
Change
|
%
Change
|
Ticket- Main
cabin
|
$
|
1,057
|
|
$
|
6,021
|
|
$
|
(4,964)
|
|
(82)
|
%
|
|
$
|
5,229
|
|
$
|
16,680
|
|
$
|
(11,451)
|
|
(69)
|
%
|
Ticket- Business
cabin and premium products
|
577
|
|
4,008
|
|
(3,431)
|
|
(86)
|
%
|
|
3,483
|
|
11,306
|
|
(7,823)
|
|
(69)
|
%
|
Loyalty travel
awards
|
143
|
|
732
|
|
(589)
|
|
(80)
|
%
|
|
731
|
|
2,174
|
|
(1,443)
|
|
(66)
|
%
|
Travel-related
services
|
161
|
|
649
|
|
(488)
|
|
(75)
|
%
|
|
742
|
|
1,872
|
|
(1,130)
|
|
(60)
|
%
|
Total passenger
revenue
|
$
|
1,938
|
|
$
|
11,410
|
|
$
|
(9,472)
|
|
(83)
|
%
|
|
$
|
10,185
|
|
$
|
32,032
|
|
$
|
(21,847)
|
|
(68)
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
DELTA AIR LINES,
INC.
|
Other
Revenue
|
(Unaudited)
|
|
|
|
|
|
|
|
|
|
|
Three Months
Ended
|
|
|
|
Nine Months
Ended
|
|
|
|
September
30,
|
|
|
|
September
30,
|
|
|
(in
millions)
|
2020
|
2019
|
$
Change
|
%
Change
|
|
2020
|
2019
|
$
Change
|
%
Change
|
Ancillary businesses
and refinery
|
$
|
572
|
|
$
|
291
|
|
$
|
281
|
|
97
|
%
|
|
$
|
1,185
|
|
$
|
990
|
|
$
|
195
|
|
20
|
%
|
Loyalty
program
|
343
|
|
485
|
|
(142)
|
|
(29)
|
%
|
|
1,086
|
|
1,443
|
|
(357)
|
|
(25)
|
%
|
Miscellaneous
|
67
|
|
185
|
|
(118)
|
|
(64)
|
%
|
|
263
|
|
536
|
|
(273)
|
|
(51)
|
%
|
Total other
revenue
|
$
|
982
|
|
$
|
961
|
|
$
|
21
|
|
2
|
%
|
|
$
|
2,534
|
|
$
|
2,969
|
|
$
|
(435)
|
|
(15)
|
%
|
|
|
|
|
|
|
|
|
|
|
DELTA AIR LINES,
INC.
|
Total
Revenue
|
(Unaudited)
|
|
|
|
|
|
|
|
|
|
|
|
|
Increase
(Decrease)
|
|
|
|
|
3Q20 versus
3Q19
|
Revenue
|
|
3Q20
($M)
|
|
Change
YoY
|
Unit
Revenue
|
Yield
|
Capacity
|
Domestic
|
$
|
1,647
|
|
|
(79)%
|
(57)%
|
(12)%
|
(52)%
|
Atlantic
|
|
132
|
|
|
(94)%
|
(60)%
|
20%
|
(84)%
|
Latin
America
|
|
97
|
|
|
(86)%
|
(50)%
|
(3)%
|
(71)%
|
Pacific
|
|
62
|
|
|
(91)%
|
(58)%
|
57%
|
(78)%
|
Total
Passenger
|
$
|
1,938
|
|
|
(83)%
|
(55)%
|
(2)%
|
(63)%
|
Cargo
Revenue
|
|
142
|
|
|
(25)%
|
|
|
|
Other
Revenue
|
|
982
|
|
|
2%
|
|
|
|
Total
Revenue
|
$
|
3,062
|
|
|
(76)%
|
(35)%
|
|
|
Third Party
Refinery Sales
|
|
(417)
|
|
|
|
|
|
|
Total Revenue,
adjusted
|
$
|
2,645
|
|
|
(79)%
|
(43)%
|
|
|
|
|
|
|
|
|
|
|
DELTA AIR LINES,
INC.
Statistical
Summary
(Unaudited)
|
|
|
Three Months
Ended
|
|
|
|
Nine Months
Ended
|
|
|
|
September
30,
|
|
|
|
September
30,
|
|
|
|
2020
|
2019
|
Change
|
|
2020
|
2019
|
Change
|
Revenue passenger
miles (millions)
|
11,545
|
|
66,862
|
|
(83)
|
|
%
|
|
58,229
|
|
181,652
|
|
(68)
|
|
%
|
Available seat miles
(millions)
|
28,290
|
|
75,742
|
|
(63)
|
|
%
|
|
97,771
|
|
209,911
|
|
(53)
|
|
%
|
Passenger mile yield
(cents)
|
16.78
|
|
17.07
|
|
(2)
|
|
%
|
|
17.49
|
|
17.63
|
|
(1)
|
|
%
|
Passenger revenue per
available seat mile (cents)
|
6.85
|
|
15.06
|
|
(55)
|
|
%
|
|
10.42
|
|
15.26
|
|
(32)
|
|
%
|
Total revenue per
available seat mile (cents)
|
10.82
|
|
16.58
|
|
(35)
|
|
%
|
|
13.42
|
|
16.94
|
|
(21)
|
|
%
|
TRASM, adjusted - see
Note A (cents)
|
9.35
|
|
16.51
|
|
(43)
|
|
%
|
|
12.70
|
|
16.83
|
|
(25)
|
|
%
|
Operating cost per
available seat mile (cents)
|
33.40
|
|
13.85
|
|
NM
|
|
|
|
25.30
|
|
14.46
|
|
75
|
|
%
|
CASM-Ex - see Note A
(cents)
|
15.96
|
|
10.15
|
|
57
|
|
%
|
|
16.74
|
|
10.66
|
|
57
|
|
%
|
Passenger load
factor
|
41
|
%
|
88
|
%
|
(47)
|
|
pts
|
|
60
|
%
|
87
|
%
|
(27)
|
|
pts
|
Fuel gallons consumed
(millions)
|
391
|
|
1,154
|
|
(66)
|
|
%
|
|
1,437
|
|
3,215
|
|
(55)
|
|
%
|
Average price per
fuel gallon
|
$
|
1.25
|
|
$
|
1.94
|
|
(36)
|
|
%
|
|
$
|
1.71
|
|
$
|
2.03
|
|
(16)
|
|
%
|
Average price per
fuel gallon, adjusted - see Note A
|
$
|
1.25
|
|
$
|
1.96
|
|
(36)
|
|
%
|
|
$
|
1.70
|
|
$
|
2.02
|
|
(16)
|
|
%
|
DELTA AIR LINES,
INC.
|
|
Consolidated
Statements of Cash Flows
|
|
(Unaudited)
|
|
|
Three Months
Ended
|
|
|
September
30,
|
|
(in
millions)
|
2020
|
2019
|
|
Cash Flows From
Operating Activities:
|
|
|
|
Net (loss)
income
|
$
|
(5,379)
|
|
$
|
1,495
|
|
|
Restructuring
charges
|
1,690
|
|
—
|
|
|
Depreciation and
amortization
|
544
|
|
631
|
|
|
Deferred income
taxes
|
(1,481)
|
|
460
|
|
|
Pension,
postretirement and postemployment payments greater than
expense
|
1,111
|
|
2
|
|
|
Impairments and
equity method losses/(gains)
|
114
|
|
(27)
|
|
|
Change in other
payables, deferred rev and accrued liabilities
|
800
|
|
(112)
|
|
|
Changes in air
traffic liability
|
(382)
|
|
(854)
|
|
|
Change in noncurrent
liabilities
|
1,074
|
|
26
|
|
|
Deferred CARES Act
grant recognition
|
(825)
|
|
—
|
|
|
Other, net
|
159
|
|
624
|
|
|
Net cash (used
in)/provided by operating activities
|
(2,575)
|
|
2,245
|
|
|
|
|
|
|
Cash Flows From
Investing Activities:
|
|
|
|
Property and
equipment additions:
|
|
|
|
Flight equipment,
including advance refunds/(payments)
|
65
|
|
(549)
|
|
|
Ground property and
equipment, including technology
|
(198)
|
|
(396)
|
|
|
Purchase of
short-term investments
|
(3,745)
|
|
—
|
|
|
Redemption of
short-term investments
|
3,000
|
|
—
|
|
|
Acquisition of
strategic investments
|
—
|
|
(170)
|
|
|
Loans to
others
|
(235)
|
|
—
|
|
|
Other, net
|
(31)
|
|
(10)
|
|
|
Net cash used in
investing activities
|
(1,144)
|
|
(1,125)
|
|
|
|
|
|
|
Cash Flows From
Financing Activities:
|
|
|
|
Payments on debt and
finance lease obligations
|
(607)
|
|
(355)
|
|
|
Repurchase of common
stock
|
—
|
|
(208)
|
|
|
Cash
dividends
|
—
|
|
(260)
|
|
|
Proceeds from
long-term obligations
|
10,734
|
|
—
|
|
|
Fuel card
obligation
|
261
|
|
(628)
|
|
|
Other, net
|
(141)
|
|
—
|
|
|
Net cash provided
by/(used in) financing activities
|
10,247
|
|
(1,451)
|
|
|
|
|
|
|
Net
Increase/(Decrease) in Cash, Cash Equivalents and Restricted Cash
Equivalents
|
6,528
|
|
(331)
|
|
|
Cash, cash
equivalents and restricted cash equivalents at beginning of
period
|
$
|
11,818
|
|
$
|
3,029
|
|
|
Cash, cash
equivalents and restricted cash equivalents at end of
period
|
$
|
18,346
|
|
$
|
2,698
|
|
|
|
|
|
|
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
|
$
|
16,477
|
|
$
|
1,899
|
|
|
Restricted cash included in
prepaid expenses and other
|
189
|
|
46
|
|
|
Other
assets:
|
|
|
|
Cash restricted for airport
construction
|
1,680
|
|
753
|
|
|
Total cash, cash
equivalents and restricted cash equivalents
|
$
|
18,346
|
|
$
|
2,698
|
|
|
|
|
|
|
DELTA AIR LINES,
INC.
|
Consolidated
Balance Sheets
|
(Unaudited)
|
|
|
|
|
|
|
|
September
30,
|
|
December
31,
|
(in
millions)
|
2020
|
|
2019
|
ASSETS
|
Current
Assets:
|
|
|
|
|
Cash and cash
equivalents
|
$
|
16,477
|
|
|
$
|
2,882
|
|
|
Short-term
investments
|
5,048
|
|
|
—
|
|
|
Accounts receivable,
net
|
1,503
|
|
|
2,854
|
|
|
Fuel
inventory
|
353
|
|
|
730
|
|
|
Expendable parts and
supplies inventories, net
|
393
|
|
|
521
|
|
|
Prepaid expenses and
other
|
1,256
|
|
|
1,262
|
|
|
Total current
assets
|
25,030
|
|
|
8,249
|
|
|
|
|
|
|
Property and
Equipment, Net:
|
|
|
|
|
Property and
equipment, net
|
26,602
|
|
|
31,310
|
|
|
|
|
|
|
Other
Assets:
|
|
|
|
|
Operating lease
right-of-use assets
|
5,881
|
|
|
5,627
|
|
|
Goodwill
|
9,753
|
|
|
9,781
|
|
|
Identifiable
intangibles, net
|
6,014
|
|
|
5,163
|
|
|
Cash restricted for
airport construction
|
1,680
|
|
|
636
|
|
|
Equity
investments
|
1,562
|
|
|
2,568
|
|
|
Deferred income
taxes, net
|
1,305
|
|
|
120
|
|
|
Other noncurrent
assets
|
1,249
|
|
|
1,078
|
|
|
Total other
assets
|
27,444
|
|
|
24,973
|
|
Total
assets
|
$
|
79,076
|
|
|
$
|
64,532
|
|
|
|
|
|
|
LIABILITIES AND
STOCKHOLDERS' EQUITY
|
Current
Liabilities:
|
|
|
|
|
Current maturities of
debt and finance leases
|
$
|
5,045
|
|
|
$
|
2,287
|
|
|
Current maturities of
operating leases
|
714
|
|
|
801
|
|
|
Air traffic
liability
|
4,379
|
|
|
5,116
|
|
|
Accounts
payable
|
2,403
|
|
|
3,266
|
|
|
Accrued salaries and
related benefits
|
1,904
|
|
|
3,701
|
|
|
Loyalty program
deferred revenue
|
1,284
|
|
|
3,219
|
|
|
Fuel card
obligation
|
1,100
|
|
|
736
|
|
|
Other accrued
liabilities
|
2,896
|
|
|
1,078
|
|
|
Total current
liabilities
|
19,725
|
|
|
20,204
|
|
|
|
|
|
|
Noncurrent
Liabilities:
|
|
|
|
|
Debt and finance
leases
|
29,825
|
|
|
8,873
|
|
|
Noncurrent air
traffic liability
|
239
|
|
|
—
|
|
|
Pension,
postretirement and related benefits
|
9,272
|
|
|
8,452
|
|
|
Loyalty program
deferred revenue
|
5,805
|
|
|
3,509
|
|
|
Noncurrent operating
leases
|
5,856
|
|
|
5,294
|
|
|
Deferred income
taxes, net
|
—
|
|
|
1,456
|
|
|
Other noncurrent
liabilities
|
4,997
|
|
|
1,386
|
|
|
Total noncurrent
liabilities
|
55,994
|
|
|
28,970
|
|
|
|
|
|
|
Commitments and
Contingencies
|
|
|
|
|
|
|
|
|
Stockholders'
Equity:
|
3,357
|
|
|
15,358
|
|
Total liabilities and
stockholders' equity
|
$
|
79,076
|
|
|
$
|
64,532
|
|
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 because the
adjusting items such as those used in the reconciliations below
will not be known until the end of the period and could be
significant.
Pre-Tax (Loss)/Income and Net (Loss)/Income, adjusted. In
the current period, pre-tax (loss)/income and net (loss)/income,
adjusted exclude the following items directly related to the
impact of COVID-19 and our response for comparability with the
prior period:
Restructuring charges. We
recognized $5.3 billion of
restructuring charges following strategic business decisions in
response to the COVID-19 pandemic. These charges primarily include
voluntary early retirement and separation program charges and
impairments and related charges from the decisions to retire the
remaining 767-300ER fleet and the 717 and CRJ-200 fleets.
CARES Act grant
recognition. We recognized $1.3
billion of the grant proceeds from the CARES Act payroll
support program as a contra-expense. We are recognizing the grant
proceeds as contra-expense based on the periods that the funds are
intended to compensate and we expect to use all proceeds from the
payroll support program by the end of 2020.
Impairments and equity method
losses. These charges relate to the write-down of our
investment in Virgin Atlantic based on our share of its losses.
Pension settlement
charges. These charges were recognized in connection with
the voluntary programs.
We also regularly adjust pre-tax (loss)/income and net
(loss)/income for the following items to determine pre-tax
(loss)/income and net (loss)/income, adjusted for the reasons
described below. We include the income tax effect of adjustments
when presenting net (loss)/income, adjusted.
MTM adjustments and settlements
on hedges. Mark-to-market ("MTM") adjustments are
defined as fair value changes recorded in periods other than the
settlement period. Such fair value changes are not necessarily
indicative of the actual settlement value of the underlying hedge
in the contract settlement period. Settlements represent cash
received or paid on hedge contracts settled during the applicable
period.
Equity investment MTM
adjustments. We previously recorded our proportionate
share of losses from our equity investments in Virgin Atlantic,
Grupo Aeroméxico and LATAM in non-operating expense. (As a result
of Grupo Aeroméxico's and LATAM's bankruptcy filings, we no longer
have significant influence with Grupo Aeroméxico or LATAM and have
discontinued accounting for these investments under the equity
method in the June 2020 quarter.) We
adjust for our equity method investees' hedge portfolio MTM
adjustments to allow investors to understand and analyze our core
operational performance in the periods shown.
MTM adjustments on
investments. Unrealized gains/losses on our equity
investments in China Eastern, Air
France-KLM and Hanjin-KAL, the largest shareholder of Korean Air,
which are accounted for at fair value in non-operating expense, are
driven by changes in stock prices and foreign currency. Adjusting
for these gains/losses allows investors to better understand and
analyze our core operational performance in the periods
shown.
Delta Private Jets
adjustment. Because we combined Delta Private Jets with Wheels
Up in January 2020, we have excluded
the impact of Delta Private Jets from 2019 results for
comparability.
|
Three Months
Ended
|
|
Three Months
Ended
|
|
September 30,
2020
|
|
September 30,
2020
|
|
Pre-Tax
|
Income
|
Net
|
|
Net
Loss
|
(in millions, except
per share data)
|
Loss
|
Tax
|
Loss
|
|
Per Diluted
Share
|
GAAP
|
$
|
(6,859)
|
|
$
|
1,480
|
|
$
|
(5,379)
|
|
|
$
|
(8.47)
|
|
Less: Restructuring
charges
|
5,345
|
|
(1,271)
|
|
4,074
|
|
|
|
Less: CARES Act grant
recognition
|
(1,315)
|
|
313
|
|
(1,002)
|
|
|
|
Less: Impairments and
equity method losses
|
114
|
|
—
|
|
114
|
|
|
|
Less: Pension
settlement charges
|
30
|
(7)
|
|
23
|
|
|
|
Adjusted
for:
|
|
|
|
|
|
MTM adjustments and
settlements on hedges
|
(3)
|
|
1
|
|
(2)
|
|
|
|
Equity investment MTM
adjustments
|
—
|
|
—
|
|
—
|
|
|
|
MTM adjustments on
investments
|
99
|
|
(23)
|
|
76
|
|
|
|
Non-GAAP
|
$
|
(2,589)
|
|
$
|
493
|
|
$
|
(2,096)
|
|
|
$
|
(3.30)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months
Ended
|
|
Three Months
Ended
|
|
September 30,
2019
|
|
September 30,
2019
|
|
Pre-Tax
|
Income
|
Net
|
|
Net
Income
|
(in millions, except
per share data)
|
Income
|
Tax
|
Income
|
|
Per Diluted
Share
|
GAAP
|
$
|
1,947
|
|
$
|
(452)
|
|
$
|
1,495
|
|
|
$
|
2.31
|
|
Adjusted
for:
|
|
|
|
|
|
MTM adjustments and
settlements on hedges
|
(25)
|
|
6
|
|
(19)
|
|
|
|
Equity investment MTM
adjustments
|
10
|
|
(2)
|
|
8
|
|
|
|
MTM adjustments on
investments
|
35
|
|
(13)
|
|
22
|
|
|
|
Delta Private Jets
adjustment
|
1
|
|
—
|
|
1
|
|
|
|
Non-GAAP
|
$
|
1,968
|
|
$
|
(461)
|
|
$
|
1,507
|
|
|
$
|
2.33
|
|
|
|
|
|
|
|
Operating Revenue, adjusted and Total Revenue Per Available
Seat Mile ("TRASM"), adjusted. We adjust operating revenue
and TRASM for third party refinery sales for the reasons described
below. We make an adjustment related to Delta Private Jets for the
same reason described above under the heading pre-tax (loss)/income
and net (loss)/income, adjusted.
Third-party refinery
sales. We adjust operating revenue and TRASM for refinery
sales to third parties to determine operating revenue, adjusted and
TRASM, adjusted because these revenues are not related to our
airline segment. Operating revenue, adjusted and TRASM, adjusted
therefore provides a more meaningful comparison of revenue from our
airline operations to the rest of the airline industry.
|
|
|
Three Months
Ended
|
|
|
(in
millions)
|
|
September 30,
2020
|
|
September 30,
2019
|
|
Change
|
Operating
revenue
|
$
|
3,062
|
|
|
$
|
12,560
|
|
|
|
Adjusted
for:
|
|
|
|
|
|
Third-party refinery
sales
|
(417)
|
|
|
(6)
|
|
|
|
Delta Private Jets
adjustment
|
—
|
|
|
(47)
|
|
|
|
Operating revenue,
adjusted
|
$
|
2,645
|
|
|
$
|
12,507
|
|
|
(79)
|
%
|
|
|
|
|
|
|
|
|
|
|
|
Nine Months
Ended
|
|
|
(in
millions)
|
|
September 30,
2020
|
|
September 30,
2019
|
|
Change
|
Operating
revenue
|
$
|
13,122
|
|
|
$
|
35,568
|
|
|
|
Adjusted
for:
|
|
|
|
|
|
Third-party refinery
sales
|
(709)
|
|
|
(94)
|
|
|
|
Delta Private Jets
adjustment
|
—
|
|
|
(139)
|
|
|
|
Operating revenue,
adjusted
|
$
|
12,413
|
|
|
$
|
35,335
|
|
|
(65)
|
%
|
|
|
|
|
|
|
|
|
|
|
|
Three Months
Ended
|
|
|
|
|
September 30,
2020
|
|
September 30,
2019
|
|
Change
|
TRASM
(cents)
|
10.82
|
|
|
16.58
|
|
|
|
Adjusted
for:
|
|
|
|
|
|
Third-party refinery
sales
|
(1.47)
|
|
|
(0.01)
|
|
|
|
Delta Private Jets
adjustment
|
—
|
|
|
(0.06)
|
|
|
|
TRASM,
adjusted
|
9.35
|
|
|
16.51
|
|
|
(43)
|
%
|
|
|
|
|
|
|
|
|
|
|
|
Nine Months
Ended
|
|
|
|
|
September 30,
2020
|
|
September 30,
2019
|
|
Change
|
TRASM
(cents)
|
13.42
|
|
|
16.94
|
|
|
|
Adjusted
for:
|
|
|
|
|
|
Third-party refinery
sales
|
(0.73)
|
|
|
(0.05)
|
|
|
|
Delta Private Jets
adjustment
|
—
|
|
|
(0.07)
|
|
|
|
TRASM,
adjusted
|
12.70
|
|
|
16.83
|
|
|
(25)
|
%
|
Operating Expense, adjusted. In the current period,
operating expense, adjusted excludes the following items directly
related to the impact of COVID-19 and our response: restructuring
charges and CARES Act grant recognition, as discussed above under
the heading pre-tax (loss)/income and net (loss)/income, adjusted.
We also adjust operating expense for MTM adjustments and
settlements on hedges, third-party refinery sales and Delta Private
Jets adjustment for the same reasons described above under the
headings pre-tax (loss)/income and net (loss)/income, adjusted, and
operating revenue, adjusted and TRASM, adjusted to determine
operating expense, adjusted.
|
|
Three Months
Ended
|
|
|
(in
millions)
|
September 30,
2020
|
|
September 30,
2019
|
|
Change
|
Operating
expense
|
$
|
9,448
|
|
|
$
|
10,489
|
|
|
|
Less: Restructuring
charges
|
(5,345)
|
|
|
—
|
|
|
|
Less: CARES Act grant
recognition
|
1,315
|
|
|
—
|
|
|
|
Adjusted
for:
|
|
|
|
|
|
MTM adjustments and
settlements on hedges
|
3
|
|
|
25
|
|
|
|
Third-party refinery
sales
|
(417)
|
|
|
(6)
|
|
|
|
Delta Private Jets
adjustment
|
—
|
|
|
(49)
|
|
|
|
Operating expense,
adjusted
|
$
|
5,004
|
|
|
$
|
10,460
|
|
|
$
|
(5,455)
|
|
Cash Burn. We present cash burn because management
believes this metric is helpful to investors to evaluate the
company's ability to maintain liquidity and return to cash
generation. The company defines cash burn as net cash from
operating activities and net cash used in investing activities,
adjusted for (i) net purchases of short-term investments, (ii)
strategic investments, (iii) net cash flows related to certain
airport construction projects, (iv) proceeds from financing
arrangements that are reported within investing activities, (v)
CARES Act grant proceeds, and (vi) other charges that are not
representative of our core operations, such as charges associated
with our voluntary separation and early retirement programs.
Adjustments include:
Net purchases of short-term
investments. Net purchases of short-term investments
represent the net purchase and sale activity of investments and
marketable securities in the period, including gains and losses. We
adjust for this activity to provide investors a better
understanding of the company's free cash flow generated by our
operations.
Strategic
investments. Cash flows related to our investments in and
related transactions with other airlines are included in our GAAP
investing activities. We adjust for this activity because it
provides a more meaningful comparison to our airline industry
peers.
Net cash flows related to
certain airport construction projects and other. Cash
flows related to certain airport construction projects are included
in our GAAP operating activities and capital expenditures. We have
adjusted for these items, which were primarily funded by cash
restricted for airport construction, to provide investors a better
understanding of the company's free cash flow and capital
expenditures that are core to our operational performance in the
periods shown.
Proceeds from financing
arrangements that are reported within investing
activities. Cash flows from proceeds from financing
arrangements that are reported within investing activities (such as
certain sale-leaseback transactions) are removed from free cash
flow in calculating daily cash burn to better illustrate the cash
generated from our core operations.
CARES Act grant proceeds.
Cash flows related to the CARES act payroll support program grant
proceeds, reported within operating activities in GAAP results. We
adjust free cash flow for this item in calculating daily cash burn
to better illustrate the cash from our core operations.
Voluntary programs. Cash
flows from the voluntary separation and early retirement programs
offered to employees during the September quarter, reported within
operating activities in GAAP results. We adjust free cash flow for
this item in calculating daily cash burn to better illustrate the
cash from our core operations.
|
|
|
|
Three Months
Ended
|
Month
Ended
|
Month
Ended
|
(in
millions)
|
|
|
September 30,
2020
|
September 30,
2020
|
June 30,
2020
|
Net cash used in
operating activities
|
|
$
|
(2,575)
|
|
$
|
(720)
|
|
$
|
75
|
|
Net cash used in
investing activities
|
|
(1,144)
|
|
(1,033)
|
|
(754)
|
|
Adjustments:
|
|
|
|
|
Net purchases of
short-term investments
|
|
745
|
|
1,007
|
|
1,091
|
|
Strategic
investments
|
|
235
|
|
(15)
|
|
—
|
|
Net cash flows related
to certain airport construction projects and other
|
|
208
|
|
8
|
|
(30)
|
|
Total free cash
flow
|
|
$
|
(2,531)
|
|
$
|
(753)
|
|
$
|
382
|
|
Proceeds from
financing arrangements reported within investing
activities
|
|
37
|
|
37
|
|
(422)
|
|
CARES Act grant
proceeds
|
|
(491)
|
|
(110)
|
|
(761)
|
|
Voluntary
programs
|
|
813
|
|
273
|
|
—
|
|
Adjusted free cash
flow
|
|
$
|
(2,173)
|
|
$
|
(553)
|
|
$
|
(801)
|
|
Days in
period
|
|
92
|
|
30
|
|
30
|
|
Average daily cash
burn
|
|
$
|
(24)
|
|
$
|
(18)
|
|
$
|
(27)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Fuel expense, adjusted and Average fuel price per gallon,
adjusted. The tables below show the components of fuel
expense, including the impact of hedging and the refinery on fuel
expense and average price per gallon. We then adjust for MTM
adjustments and settlements on hedges and Delta Private Jets for
the same reasons described under the heading pre-tax (loss)/income
and net (loss)/ income, adjusted.
|
|
|
|
|
|
Average Price Per
Gallon
|
|
|
Three Months
Ended
|
|
|
Three Months
Ended
|
|
|
September
30,
|
|
|
September
30,
|
(in millions, except
per gallon data)
|
2020
|
2019
|
|
|
2020
|
2019
|
Fuel purchase
cost
|
$
|
449
|
|
$
|
2,313
|
|
|
|
$
|
1.16
|
|
$
|
2.00
|
|
Fuel hedge
impact
|
9
|
|
(25)
|
|
|
|
0.02
|
|
(0.02)
|
|
Refinery segment
impact
|
28
|
|
(49)
|
|
|
|
0.07
|
|
(0.04)
|
|
Total fuel
expense
|
$
|
486
|
|
$
|
2,239
|
|
|
|
$
|
1.25
|
|
$
|
1.94
|
|
MTM adjustments and
settlements on hedges
|
3
|
|
25
|
|
|
|
0.01
|
|
0.02
|
|
Delta Private Jets
adjustment
|
—
|
|
(7)
|
|
|
|
—
|
|
(0.01)
|
|
Total fuel expense,
adjusted
|
$
|
489
|
|
$
|
2,257
|
|
|
|
$
|
1.25
|
|
$
|
1.96
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Average Price Per
Gallon
|
|
|
Nine Months
Ended
|
|
|
Nine Months
Ended
|
|
|
September
30,
|
|
|
September
30,
|
(in millions, except
per gallon data)
|
2020
|
2019
|
|
|
2020
|
2019
|
Fuel purchase
cost
|
$
|
2,324
|
|
$
|
6,568
|
|
|
|
$
|
1.62
|
|
$
|
2.04
|
|
Fuel hedge
impact
|
16
|
|
(8)
|
|
|
|
0.01
|
|
—
|
|
Refinery segment
impact
|
113
|
|
(52)
|
|
|
|
0.08
|
|
(0.01)
|
|
Total fuel
expense
|
$
|
2,453
|
|
$
|
6,508
|
|
|
|
$
|
1.71
|
|
$
|
2.03
|
|
MTM adjustments and
settlements on hedges
|
(4)
|
|
8
|
|
|
|
(0.01)
|
|
—
|
|
Delta Private Jets
adjustment
|
—
|
|
(22)
|
|
|
|
—
|
|
(0.01)
|
|
Total fuel expense,
adjusted
|
$
|
2,449
|
|
$
|
6,494
|
|
|
|
$
|
1.70
|
|
$
|
2.02
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Percent change
year-over-year
|
(62)
|
%
|
|
|
|
|
|
Non-operating expense, adjusted. In the current
period, non-operating expense, adjusted excludes the following
items directly related to the impact of COVID-19 and our response:
impairments and equity method losses, and pension settlement
changes, as discussed above under the heading pre-tax (loss)/income
and net (loss)/income, adjusted. We also adjust for equity
investment MTM adjustments and MTM adjustments on investments to
determine non-operating expense, adjusted for the same reasons
described above in the heading pre-tax (loss)/income and net
(loss)/income, adjusted.
|
|
|
Three Months
Ended
|
(in
millions)
|
|
September 30,
2020
|
|
September 30,
2019
|
Non-operating
expense
|
$
|
473
|
|
|
$
|
124
|
|
Less: Impairments and
equity method losses
|
(114)
|
|
|
|
Less: Pension
settlement charges
|
(30)
|
|
|
|
Adjusted
for:
|
|
|
|
Equity investment MTM
adjustments
|
—
|
|
|
(10)
|
|
MTM adjustments on
investments
|
(99)
|
|
|
(35)
|
|
Non-operating
expense, adjusted
|
$
|
230
|
|
|
$
|
79
|
|
Adjusted Net Debt. Delta uses adjusted total debt,
including aircraft rent, in addition to adjusted debt and finance
leases, to present estimated financial obligations. Delta reduces
adjusted total debt by cash, cash equivalents and short-term
investments, and LGA restricted cash, resulting in adjusted net
debt, to present the amount of assets needed to satisfy the debt.
Management believes this metric is helpful to investors in
assessing the company's overall debt profile.
|
|
|
|
(in
millions)
|
|
September 30,
2020
|
Debt and finance
lease obligations
|
|
$
|
34,870
|
|
Plus: sale-leaseback
financing liabilities
|
|
|
2,295
|
|
Plus: unamortized
discount/(premium) and debt issue cost, net and other
|
|
252
|
|
Adjusted debt and
finance lease obligations
|
|
$
|
37,417
|
|
Plus: 7x last twelve
months' aircraft rent
|
|
2,800
|
|
Adjusted total
debt
|
|
$
|
40,217
|
|
Less: cash, cash
equivalents and short-term investments
|
|
(21,525)
|
|
Less: LGA restricted
cash
|
|
(1,680)
|
|
Adjusted net
debt
|
|
$
|
17,012
|
|
|
|
|
|
|
|
|
|
(in
millions)
|
|
December 31,
2019
|
Debt and finance
lease obligations
|
|
$
|
11,160
|
|
Plus: sale-leaseback
financing liabilities
|
|
|
—
|
|
Plus: unamortized
discount/(premium) and debt issue cost, net and other
|
|
(115)
|
|
Adjusted debt and
finance lease obligations
|
|
$
|
11,044
|
|
Plus: 7x last twelve
months' aircraft rent
|
|
2,963
|
|
Adjusted total
debt
|
|
$
|
14,007
|
|
Less: cash, cash
equivalents and short-term investments
|
|
(2,882)
|
|
Less: LGA restricted
cash
|
|
(636)
|
|
Adjusted net
debt
|
|
$
|
10,489
|
|
|
|
|
|
|
|
|
|
(in
millions)
|
|
September 30,
2019
|
Debt and finance
lease obligations
|
|
$
|
10,119
|
|
Plus: sale-leaseback
financing liabilities
|
|
|
—
|
|
Plus: unamortized
discount/(premium) and debt issue cost, net and other
|
|
(151)
|
|
Adjusted debt and
finance lease obligations
|
|
$
|
9,968
|
|
Plus: 7x last twelve
months' aircraft rent
|
|
2,948
|
|
Adjusted total
debt
|
|
$
|
12,916
|
|
Less: cash, cash
equivalents and short-term investments
|
|
(1,899)
|
|
Less: LGA restricted
cash
|
|
(753)
|
|
Adjusted net
debt
|
|
$
|
10,265
|
|
Non-Fuel Unit Cost or Cost per Available Seat Mile,
("CASM-Ex"). In the current period, CASM-Ex excludes the
following items directly related to the impact of COVID-19 and our
response: restructuring charges and CARES Act grant recognition, as
discussed above under the heading pre-tax (loss)/income and net
(loss)/income, adjusted. We also adjust CASM for the following
items to determine CASM-Ex for the reasons described below. We
adjust for refinery sales to third parties for the same reason
described under the heading operating revenue, adjusted and TRASM,
adjusted. We adjust for Delta Private Jets for the same reason
described above under the heading pre-tax (loss)/income and net
(loss)/income, adjusted.
Aircraft fuel and related
taxes. The volatility in fuel prices impacts the comparability
of year-over-year financial performance. The adjustment for
aircraft fuel and related taxes allows investors to understand and
analyze our non-fuel costs and year-over-year financial
performance.
Profit sharing. We
adjust for profit sharing because this adjustment allows investors
to better understand and analyze our recurring cost performance and
provides a more meaningful comparison of our core operating costs
to the airline industry.
|
|
|
|
Three Months
Ended
|
|
|
|
|
|
|
September 30,
2020
|
|
September 30,
2019
|
|
Change
|
CASM
(cents)
|
33.40
|
|
|
13.85
|
|
|
|
Less: Restructuring
charges
|
(18.89)
|
|
|
—
|
|
|
|
Less: CARES Act grant
recognition
|
4.65
|
|
|
—
|
|
|
|
Adjusted
for:
|
|
|
|
|
|
Aircraft fuel and related
taxes
|
(1.72)
|
|
|
(2.96)
|
|
|
|
Third-party refinery
sales
|
(1.47)
|
|
|
(0.01)
|
|
|
|
Profit sharing
|
—
|
|
|
(0.68)
|
|
|
|
Delta Private Jets
adjustment
|
—
|
|
|
(0.05)
|
|
|
|
CASM-Ex
|
15.96
|
|
10.15
|
|
57
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Nine Months
Ended
|
|
|
|
|
|
|
September 30,
2020
|
|
September 30,
2019
|
|
Change
|
CASM
(cents)
|
25.30
|
|
|
14.46
|
|
|
|
Less: Restructuring
charges
|
(7.98)
|
|
|
—
|
|
|
|
Less: CARES Act grant
recognition
|
2.65
|
|
|
—
|
|
|
|
Adjusted
for:
|
|
|
|
|
|
Aircraft fuel and related
taxes
|
(2.51)
|
|
|
(3.10)
|
|
|
|
Third-party refinery
sales
|
(0.73)
|
|
|
(0.05)
|
|
|
|
Profit sharing
|
—
|
|
|
(0.60)
|
|
|
|
Delta Private Jets
adjustment
|
—
|
|
|
(0.06)
|
|
|
|
CASM-Ex
|
16.74
|
|
|
10.66
|
|
57
|
%
|
View original content to download
multimedia:http://www.prnewswire.com/news-releases/delta-air-lines-announces-september-quarter-financial-results-301150937.html
SOURCE Delta Air Lines