Originally Posted by
notEnuf
Delta has paid $10B+ in debt reduction in 6 years now saving $700M in interest a year.
$1.6B per year in debt reduction continues...YES..DEBT REDUCTION
$2B in shareholder returns per year continues NO...REDUCTION IN EQUITY IS NOT A REDUCTION IN LIABILITY
$1.5B+ invested in other airlines NO...IT IS MONEY SPENT FOR AN ASSET (unless the money is being borrowed)
$2B in fuel savings this year even after hedge losses NO...FUEL SAVINGS ARE AN EXPENSE REDUCTION, NOT LIABILITY REDUCTION
$2.5 -$3B annually into fleet, facilities and tech NO...THIS IS NOT A REDUCTION IN LIABILITIES (unless monies are being borrowed for this)
$1B in pension funding (which 65% of pilots don't benefit from)YES...THIS IS A LIABILITY REDUCTION
•Strong operating cash flow, combined with disciplined capital spending, produces sustainable free cash flow of $4-5 billion annually
I'm not a Delta guy, but I am a reformed accountant-turned Continental [ok...United] pilot. See my explanations in
RED, above.
Not to pick nits here, but to say $10B+ in debt reduction is a bit misleading to the general public.
As you may (or may not) know, the Balance Sheet is a simple formula:
TOTAL ASSETS (STUFF YOU HAVE)=TOTAL LIABILITIES (STUFF YOU OWE) + TOTAL EQUITY (NET DIFFERENCE) +/- CURRENT PERIOD NET INCOME (or LOSS)
All that being said, I'm not bashing Delta, quite the opposite. They are performing like mad currently, and I hope you folks get everything you can [and the rising tide helps us, too]. That's also not to say that the Delta management couldn't use those monies shown above to reduce debt by $10B+, just that they aren't currently. I'm just clarifying a bit.
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