Any "Latest & Greatest" about Delta?
07-22-2009, 04:23 AM
Happy to be here
Joined APC: Jun 2006
Position: A-320A
Posts: 18,563
On a combined basis(3):
* Passenger revenue decreased 25%, or $2 billion, compared to the prior year period due to the global economic recession, the estimated $125 million to $150 million impact of the H1N1 virus and a 7% capacity reduction. Passenger unit revenue (PRASM) declined 20%, driven by a 19% decline in yield.
* Cargo revenue declined 54%, or $200 million, reflecting lower volume and yield due to the recession. Freighter capacity was 50% lower year over year, as Delta continues to reduce capacity to achieve its plan of discontinuing all freighter flying by the end of 2009.
* Other, net revenue grew 15%, or $123 million, primarily due to increased baggage fee revenue and improved terms from Delta's affinity card agreement with American Express.
Cost Discipline
In the June 2009 quarter, Delta's operating expense on a GAAP basis increased $413 million year over year. This increase is primarily due to the impact of the company's merger with Northwest Airlines, partially offset by lower fuel price in the June 2009 quarter, and a $1.2 billion intangibles impairment charge recorded in the June 2008 quarter. On a combined basis, excluding merger-related expenses and prior year special items, operating expense decreased $1.9 billion due to significantly lower fuel expense.
On a combined basis:
* Both consolidated and mainline unit cost (CASM(4)), excluding merger-related and fuel expenses and prior year special items, increased 2% year over year in the June 2009 quarter due to higher pension expense.
* Non-operating expenses excluding special items increased $99 million in the June 2009 quarter primarily due to non-cash debt discount amortization.
Liquidity Position
As of June 30, 2009, Delta had $5.4 billion in unrestricted liquidity, including $4.9 billion in cash, cash equivalents and short-term investments and $500 million available under an undrawn line of credit. Delta generated $834 million in cash from operations, and $509 million in free cash flow for the quarter.
Net investing activities during the quarter were $325 million. In addition, during the quarter, debt and capital lease payments totaled approximately $400 million, and the company issued $330 million in debt related to aircraft purchases.
"In a difficult economic environment, Delta generated $834 million of cash from operations in the June quarter, allowing us to fund our debt obligations, make investments in our business, and increase our liquidity position," said Hank Halter, chief financial officer. "In addition, the hard work of the Delta people in achieving merger synergies and their focus on cost discipline resulted in a consolidated non-fuel CASM increase of only 2% compared to the prior year on a 7% capacity reduction."
Merger with Northwest
Delta has achieved more than $200 million in synergy benefits from its merger with Northwest Airlines in the first half of 2009, and expects to generate at least $500 million in total synergies in 2009. Synergies achieved year to date have improved revenue from increased market share, Delta's affinity card agreement and alignment of frequent flyer programs. In addition, costs have been reduced through streamlined overhead, facilities and technology, elimination of dedicated freighter flying and supply chain savings.
The company is on track in its integration efforts and continues to expect it will achieve its Single Operating Certificate by the end of 2009. Recent achievements include:
* Announcing a transatlantic joint venture with Air France/KLM with an estimated $12 billion in annual revenue which will result in more flight choices, frequencies, convenient flight schedules, competitive fares and harmonized services for customers. When fully implemented in 2012, the joint venture is expected to generate approximately $200 million in annual incremental pre-tax profits for Delta;
* Using the Delta and Northwest fleets more effectively across the combined network by launching additional cross-fleeting markets, such as New York-JFK to Narita;
* Completing the integration and re-branding of more than 200 airports, or more than 80% of total stations;
* Beginning pilot and flight attendant training to prepare for single carrier operations;
* Harmonizing onboard products for both domestic and international service, including regional carriers; and
* Painting 120 pre-merger Northwest aircraft in Delta livery.
Fuel Price and Related Hedges
Delta hedged 76% of its fuel consumption for the June 2009 quarter, which drove $390 million in realized fuel hedge losses for the period. As a result, Delta's average fuel price(5) for the June 2009 quarter was $2.06 per gallon, which includes $0.33 per gallon associated with fuel hedge losses.
The table below represents the fuel hedges Delta had in place as of July 17, 2009:
3Q09 4Q09 2010
---- ---- ----
Call options 30% 22% 9%
Collars - - 1%
Swaps 22% 17% -
--- --- ---
Total 52% 39% 10%
--- --- ---
Downside participation 78% 83% 99%
Avg. crude call strike $75 $82 $71
Avg. crude swap $64 $62 -
All-in projected fuel price / gallon* $2.17 $2.05
Hedge loss/gallon included in
projected price $0.11 -
* Reflects crude and refining cost assumptions of $67.50 and $7.50,
respectively. In addition, projected fuel price includes tax and
transportation costs of $0.19/gallon, and call option premiums
September 2009 Quarter Guidance
Delta's projections for the September 2009 quarter are below. This guidance is presented on a combined basis(6).
3Q 2009 Forecast
----------------
Fuel price, including taxes and hedges $2.17
Operating margin 1% - 3%
Capital expenditures $270 million
Total liquidity as of Sept. 30, 2009 $5.0 billion
3Q 2009 Forecast
(compared to 3Q 2008)
--------------------
Consolidated unit costs - excluding
fuel expense Flat to up 2%
Mainline unit costs - excluding
fuel expense Up 1% - 3%
System capacity Down 4% - 5%
Domestic Down 3% - 4%
International Down 6% - 7%
Mainline capacity Down 5% - 7%
Domestic Down 4% - 6%
International Down 5% - 7%
Other Matters
Included with this press release are Delta's Consolidated Statements of Operations for the three and six months ended June 30, 2009 and 2008; a statistical summary for those periods; selected balance sheet data as of June 30, 2009 and Dec. 31, 2008; and a reconciliation of certain non-GAAP financial measures.
Endnotes
(1) Note A to the attached Consolidated Statements of Operations provides a reconciliation of non-GAAP financial measures used in this release and provides the reasons management uses those measures.
(2) Delta's financial results under generally accepted accounting principles (GAAP) include the results of Northwest Airlines for the periods following the completion of the merger, which occurred on Oct. 29, 2008. Unless otherwise indicated, Delta presents financial results on a GAAP basis which reflects both Delta and Northwest financial results for the June 2009 quarter, but only Delta standalone results for the June 2008 quarter. The company also presents financial and operating information on a "combined basis", which management believes is more meaningful for comparing year-over-year performance. The combined basis compares Delta's GAAP results for the June 2009 quarter to the combined results of Delta and Northwest for the June 2008 quarter.
(3) Combined financial information includes the combined results of Delta and Northwest for the June 2008 quarter.
(4) Delta excludes from mainline unit cost expenses for aircraft maintenance and staffing services which it provides to third parties because these expenses are not related to the generation of a seat mile. Similarly, Delta excludes from passenger unit revenues, and includes in other revenue, revenues received for providing aircraft maintenance and staffing services to third parties, freighter operations and MLT. Management believes these classifications provide a more consistent and comparable reflection of Delta's mainline operations.
(5) Delta's June 2009 quarter average fuel price of $2.06 per gallon reflects the consolidated cost per gallon for mainline and regional operations, including contract carrier operations, net of fuel hedge impact.
(6) Year-over-year guidance comparisons assume the 2008 financial information for the applicable periods include Delta and Northwest results for the entire period, excluding special items and out-of-period fuel hedge losses.
Three Months Ended June 30,
---------------------------
2009 2008 2008
---- ---- ----
GAAP Combined GAAP
---- -------- ----
Consolidated operating expense 6,999 10,474 6,586
Less regional carriers
operating expense (1,452) (1,846) (1,344)
------ ------ ------
Mainline operating expense 5,547 8,628 5,242
===== ===== =====
Mainline CASM 10.96 cents 15.70 cents 15.93 cents
Transactions with third
parties and other (including
fuel) (0.34) (0.62) (0.41)
----- ----- -----
Mainline CASM excluding items
not related to generation of
a seat mile 10.62 cents 15.08 cents 15.52 cents
Items excluded:
Impairment of goodwill and
other assets - (3.18) (3.63)
Restructuring and merger-
related items (0.11) (0.24) (0.32)
MTM adjustments to fuel
hedges settling in future
periods - 0.46 -
-- ---- --
Mainline CASM excluding
special items 10.51 cents 12.12 cents 11.57 cents
Fuel expense and related
taxes (excluding fuel
related to transactions
with third parties) (3.31) (5.06) (4.69)
----- ----- -----
Mainline CASM excluding
fuel expense and related
taxes and special items 7.20 cents 7.06 cents 6.88 cents
==== ==== ====
ASMs 50,605 54,960 32,902
====== ====== ======
* Passenger revenue decreased 25%, or $2 billion, compared to the prior year period due to the global economic recession, the estimated $125 million to $150 million impact of the H1N1 virus and a 7% capacity reduction. Passenger unit revenue (PRASM) declined 20%, driven by a 19% decline in yield.
* Cargo revenue declined 54%, or $200 million, reflecting lower volume and yield due to the recession. Freighter capacity was 50% lower year over year, as Delta continues to reduce capacity to achieve its plan of discontinuing all freighter flying by the end of 2009.
* Other, net revenue grew 15%, or $123 million, primarily due to increased baggage fee revenue and improved terms from Delta's affinity card agreement with American Express.
Cost Discipline
In the June 2009 quarter, Delta's operating expense on a GAAP basis increased $413 million year over year. This increase is primarily due to the impact of the company's merger with Northwest Airlines, partially offset by lower fuel price in the June 2009 quarter, and a $1.2 billion intangibles impairment charge recorded in the June 2008 quarter. On a combined basis, excluding merger-related expenses and prior year special items, operating expense decreased $1.9 billion due to significantly lower fuel expense.
On a combined basis:
* Both consolidated and mainline unit cost (CASM(4)), excluding merger-related and fuel expenses and prior year special items, increased 2% year over year in the June 2009 quarter due to higher pension expense.
* Non-operating expenses excluding special items increased $99 million in the June 2009 quarter primarily due to non-cash debt discount amortization.
Liquidity Position
As of June 30, 2009, Delta had $5.4 billion in unrestricted liquidity, including $4.9 billion in cash, cash equivalents and short-term investments and $500 million available under an undrawn line of credit. Delta generated $834 million in cash from operations, and $509 million in free cash flow for the quarter.
Net investing activities during the quarter were $325 million. In addition, during the quarter, debt and capital lease payments totaled approximately $400 million, and the company issued $330 million in debt related to aircraft purchases.
"In a difficult economic environment, Delta generated $834 million of cash from operations in the June quarter, allowing us to fund our debt obligations, make investments in our business, and increase our liquidity position," said Hank Halter, chief financial officer. "In addition, the hard work of the Delta people in achieving merger synergies and their focus on cost discipline resulted in a consolidated non-fuel CASM increase of only 2% compared to the prior year on a 7% capacity reduction."
Merger with Northwest
Delta has achieved more than $200 million in synergy benefits from its merger with Northwest Airlines in the first half of 2009, and expects to generate at least $500 million in total synergies in 2009. Synergies achieved year to date have improved revenue from increased market share, Delta's affinity card agreement and alignment of frequent flyer programs. In addition, costs have been reduced through streamlined overhead, facilities and technology, elimination of dedicated freighter flying and supply chain savings.
The company is on track in its integration efforts and continues to expect it will achieve its Single Operating Certificate by the end of 2009. Recent achievements include:
* Announcing a transatlantic joint venture with Air France/KLM with an estimated $12 billion in annual revenue which will result in more flight choices, frequencies, convenient flight schedules, competitive fares and harmonized services for customers. When fully implemented in 2012, the joint venture is expected to generate approximately $200 million in annual incremental pre-tax profits for Delta;
* Using the Delta and Northwest fleets more effectively across the combined network by launching additional cross-fleeting markets, such as New York-JFK to Narita;
* Completing the integration and re-branding of more than 200 airports, or more than 80% of total stations;
* Beginning pilot and flight attendant training to prepare for single carrier operations;
* Harmonizing onboard products for both domestic and international service, including regional carriers; and
* Painting 120 pre-merger Northwest aircraft in Delta livery.
Fuel Price and Related Hedges
Delta hedged 76% of its fuel consumption for the June 2009 quarter, which drove $390 million in realized fuel hedge losses for the period. As a result, Delta's average fuel price(5) for the June 2009 quarter was $2.06 per gallon, which includes $0.33 per gallon associated with fuel hedge losses.
The table below represents the fuel hedges Delta had in place as of July 17, 2009:
3Q09 4Q09 2010
---- ---- ----
Call options 30% 22% 9%
Collars - - 1%
Swaps 22% 17% -
--- --- ---
Total 52% 39% 10%
--- --- ---
Downside participation 78% 83% 99%
Avg. crude call strike $75 $82 $71
Avg. crude swap $64 $62 -
All-in projected fuel price / gallon* $2.17 $2.05
Hedge loss/gallon included in
projected price $0.11 -
* Reflects crude and refining cost assumptions of $67.50 and $7.50,
respectively. In addition, projected fuel price includes tax and
transportation costs of $0.19/gallon, and call option premiums
September 2009 Quarter Guidance
Delta's projections for the September 2009 quarter are below. This guidance is presented on a combined basis(6).
3Q 2009 Forecast
----------------
Fuel price, including taxes and hedges $2.17
Operating margin 1% - 3%
Capital expenditures $270 million
Total liquidity as of Sept. 30, 2009 $5.0 billion
3Q 2009 Forecast
(compared to 3Q 2008)
--------------------
Consolidated unit costs - excluding
fuel expense Flat to up 2%
Mainline unit costs - excluding
fuel expense Up 1% - 3%
System capacity Down 4% - 5%
Domestic Down 3% - 4%
International Down 6% - 7%
Mainline capacity Down 5% - 7%
Domestic Down 4% - 6%
International Down 5% - 7%
Other Matters
Included with this press release are Delta's Consolidated Statements of Operations for the three and six months ended June 30, 2009 and 2008; a statistical summary for those periods; selected balance sheet data as of June 30, 2009 and Dec. 31, 2008; and a reconciliation of certain non-GAAP financial measures.
Endnotes
(1) Note A to the attached Consolidated Statements of Operations provides a reconciliation of non-GAAP financial measures used in this release and provides the reasons management uses those measures.
(2) Delta's financial results under generally accepted accounting principles (GAAP) include the results of Northwest Airlines for the periods following the completion of the merger, which occurred on Oct. 29, 2008. Unless otherwise indicated, Delta presents financial results on a GAAP basis which reflects both Delta and Northwest financial results for the June 2009 quarter, but only Delta standalone results for the June 2008 quarter. The company also presents financial and operating information on a "combined basis", which management believes is more meaningful for comparing year-over-year performance. The combined basis compares Delta's GAAP results for the June 2009 quarter to the combined results of Delta and Northwest for the June 2008 quarter.
(3) Combined financial information includes the combined results of Delta and Northwest for the June 2008 quarter.
(4) Delta excludes from mainline unit cost expenses for aircraft maintenance and staffing services which it provides to third parties because these expenses are not related to the generation of a seat mile. Similarly, Delta excludes from passenger unit revenues, and includes in other revenue, revenues received for providing aircraft maintenance and staffing services to third parties, freighter operations and MLT. Management believes these classifications provide a more consistent and comparable reflection of Delta's mainline operations.
(5) Delta's June 2009 quarter average fuel price of $2.06 per gallon reflects the consolidated cost per gallon for mainline and regional operations, including contract carrier operations, net of fuel hedge impact.
(6) Year-over-year guidance comparisons assume the 2008 financial information for the applicable periods include Delta and Northwest results for the entire period, excluding special items and out-of-period fuel hedge losses.
Three Months Ended June 30,
---------------------------
2009 2008 2008
---- ---- ----
GAAP Combined GAAP
---- -------- ----
Consolidated operating expense 6,999 10,474 6,586
Less regional carriers
operating expense (1,452) (1,846) (1,344)
------ ------ ------
Mainline operating expense 5,547 8,628 5,242
===== ===== =====
Mainline CASM 10.96 cents 15.70 cents 15.93 cents
Transactions with third
parties and other (including
fuel) (0.34) (0.62) (0.41)
----- ----- -----
Mainline CASM excluding items
not related to generation of
a seat mile 10.62 cents 15.08 cents 15.52 cents
Items excluded:
Impairment of goodwill and
other assets - (3.18) (3.63)
Restructuring and merger-
related items (0.11) (0.24) (0.32)
MTM adjustments to fuel
hedges settling in future
periods - 0.46 -
-- ---- --
Mainline CASM excluding
special items 10.51 cents 12.12 cents 11.57 cents
Fuel expense and related
taxes (excluding fuel
related to transactions
with third parties) (3.31) (5.06) (4.69)
----- ----- -----
Mainline CASM excluding
fuel expense and related
taxes and special items 7.20 cents 7.06 cents 6.88 cents
==== ==== ====
ASMs 50,605 54,960 32,902
====== ====== ======
07-22-2009, 04:23 AM
Gets Weekends Off
Joined APC: Apr 2007
Position: Flying the SEC
Posts: 2,350
Originally Posted by BigGuns
This will never happen... UAL is a Chicago based company... Obama's backyard. I see money from the feds if the banks will not lend it.
Note the last point in this story...
CNBC Stock Blog ? Southwest Airlines Earnings ? CNBC.com Market News - CNBC Stock Blog - CNBC.com
Note the last point in this story...
CNBC Stock Blog ? Southwest Airlines Earnings ? CNBC.com Market News - CNBC Stock Blog - CNBC.com
The poll numbers on government health care and cap and trade are going south too. I really don't see them further risking those bills by bailing/taking over more industries.
Of course, I could be wrong...
07-22-2009, 04:25 AM
Happy to be here
Joined APC: Jun 2006
Position: A-320A
Posts: 18,563
Originally Posted by sinca3
So.....your thoughts?
Seems to be on the estimated of most.....
Seems to be on the estimated of most.....
Cash is great.
Yield is down 26%. WOW. Not good at all.
07-22-2009, 04:28 AM
Happy to be here
Joined APC: Jun 2006
Position: A-320A
Posts: 18,563
DELTA AIR LINES, INC.
Unaudited Combined Statements of Operations
--------------------------------
Three Months Ended June 30, 2008
--------------------------------
Special
(in millions) Delta(1) Northwest(1) Items Combined
-------- ------------ ------- --------
OPERATING REVENUE:
Passenger:
Mainline $3,627 $2,638 $- $6,265
Regional carriers 1,143 506 - 1,649
----- ----- - -----
Total passenger revenue 4,770 3,144 - 7,914
Cargo 160 213 - 373
Other, net 569 232 - 801
--- --- - ---
Total operating revenue 5,499 3,589 - 9,088
OPERATING EXPENSE:
Aircraft fuel and related
taxes 1,678 1,185 253 (8) 3,116
Salaries and related costs 1,092 748 (15) (7) 1,825
Contract carrier arrangements 967 281 - 1,248
Aircraft maintenance materials
and outside repairs 295 186 - 481
Contracted services 257 207 - 464
Passenger commissions and
other selling expenses 248 224 - 472
Depreciation and amortization 302 745 (624) (5) 423
Landing fees and other rents 173 143 - 316
Aircraft rent 67 56 - 123
Passenger service 105 66 - 171
Impairment of goodwill and
other intangibles 1,196 (76) (1,120) (2) -
Restructuring and
merger-related items 104 - (104) (3) -
Other 102 123 (14) (4) 211
--- --- --- ---
Total operating expense 6,586 3,888 (1,624) 8,850
----- ----- ------ -----
OPERATING LOSS (1,087) (299) 1,624 238
OTHER (EXPENSE) INCOME:
Interest expense (141) (108) - (249)
Interest income 25 24 - 49
Miscellaneous, net 40 (208) 213 (6) 45
--- ---- --- ---
Total other expense, net (76) (292) 213 (155)
--- ---- --- ----
LOSS BEFORE INCOME TAXES (1,163) (591) 1,837 83
INCOME TAX BENEFIT 119 214 (333) (9) -
--- --- ---- ---
NET LOSS ($1,044) ($377) $1,504 $83
======== ===== ====== ===
Notes:
Combined Contract carrier arrangements expense includes $517 million for
fuel expense incurred under these arrangements.
(1) We reclassified prior period amounts to conform to current
presentations
(2) $1,120 in goodwill and other intangible asset impairments
(3) $99 in merger related charges and $5 in facilities restructuring
(4) $14 in merger-related legal charges
(5) $624 amortization related to fixed asset and intangible asset
impairments
(6) $213 impairment of investment in subsidiary
(7) $15 of retention payments related to the merger
(8) $253 in out of period fuel hedges
(9) $333 tax charge related to impairment of goodwill and intangible
assets
DELTA AIR LINES, INC.
Unaudited Combined Statements of Operations
-------------------------------------
Three Months Ended September 30, 2008
-------------------------------------
Special
(in millions) Delta(1) Northwest(1) Items Combined
-------- ------------ ------- --------
OPERATING REVENUE:
Passenger:
Mainline $3,921 $2,801 $- $6,722
Regional carriers 1,057 550 - 1,607
----- --- -- -----
Total passenger revenue 4,978 3,351 - 8,329
Cargo 162 202 - 364
Other, net 579 260 - 839
--- --- -- ---
Total operating revenue 5,719 3,813 - 9,532
OPERATING EXPENSE:
Aircraft fuel and related
taxes 1,952 1,946 (250)(5) 3,648
Salaries and related costs 1,086 706 (18)(2) 1,774
Contract carrier arrangements 941 275 - 1,216
Aircraft maintenance materials
and outside repairs 273 168 - 441
Contracted services 272 198 - 470
Passenger commissions and
other selling expenses 259 226 - 485
Depreciation and amortization 293 122 - 415
Landing fees and other rents 179 144 - 323
Aircraft rent 70 57 - 127
Passenger service 122 65 - 187
Restructuring and merger-related
items 24 1 (25)(3) -
Other 117 123 (10)(4) 230
--- --- --- ---
Total operating expense 5,588 4,031 (303) 9,316
----- ----- ---- -----
OPERATING INCOME (LOSS) 131 (218) 303 216
OTHER (EXPENSE) INCOME:
Interest expense (140) (112) - (252)
Interest income 21 21 - 42
Miscellaneous, net (62) (5) - (67)
--- -- -- ---
Total other expense, net (181) (96) - (277)
---- --- -- ----
LOSS BEFORE INCOME TAXES (50) (314) 303 (61)
INCOME TAX PROVISION - (3) - (3)
-- -- -- --
NET LOSS $(50) $(317) $303 $(64)
==== ===== ==== ====
Notes:
Combined Contract carrier arrangements expense includes $497 million for
fuel expense incurred under these arrangements.
(1) We reclassified prior period amounts to conform to current
presentations
(2) $18 of retention payments related to the merger
(3) $14 in contract carrier restructuring, $11 in facilities and merger
related charges
(4) $10 in merger-related charges
(5) $250 in out of period fuel hedges
Unaudited Combined Statements of Operations
--------------------------------
Three Months Ended June 30, 2008
--------------------------------
Special
(in millions) Delta(1) Northwest(1) Items Combined
-------- ------------ ------- --------
OPERATING REVENUE:
Passenger:
Mainline $3,627 $2,638 $- $6,265
Regional carriers 1,143 506 - 1,649
----- ----- - -----
Total passenger revenue 4,770 3,144 - 7,914
Cargo 160 213 - 373
Other, net 569 232 - 801
--- --- - ---
Total operating revenue 5,499 3,589 - 9,088
OPERATING EXPENSE:
Aircraft fuel and related
taxes 1,678 1,185 253 (8) 3,116
Salaries and related costs 1,092 748 (15) (7) 1,825
Contract carrier arrangements 967 281 - 1,248
Aircraft maintenance materials
and outside repairs 295 186 - 481
Contracted services 257 207 - 464
Passenger commissions and
other selling expenses 248 224 - 472
Depreciation and amortization 302 745 (624) (5) 423
Landing fees and other rents 173 143 - 316
Aircraft rent 67 56 - 123
Passenger service 105 66 - 171
Impairment of goodwill and
other intangibles 1,196 (76) (1,120) (2) -
Restructuring and
merger-related items 104 - (104) (3) -
Other 102 123 (14) (4) 211
--- --- --- ---
Total operating expense 6,586 3,888 (1,624) 8,850
----- ----- ------ -----
OPERATING LOSS (1,087) (299) 1,624 238
OTHER (EXPENSE) INCOME:
Interest expense (141) (108) - (249)
Interest income 25 24 - 49
Miscellaneous, net 40 (208) 213 (6) 45
--- ---- --- ---
Total other expense, net (76) (292) 213 (155)
--- ---- --- ----
LOSS BEFORE INCOME TAXES (1,163) (591) 1,837 83
INCOME TAX BENEFIT 119 214 (333) (9) -
--- --- ---- ---
NET LOSS ($1,044) ($377) $1,504 $83
======== ===== ====== ===
Notes:
Combined Contract carrier arrangements expense includes $517 million for
fuel expense incurred under these arrangements.
(1) We reclassified prior period amounts to conform to current
presentations
(2) $1,120 in goodwill and other intangible asset impairments
(3) $99 in merger related charges and $5 in facilities restructuring
(4) $14 in merger-related legal charges
(5) $624 amortization related to fixed asset and intangible asset
impairments
(6) $213 impairment of investment in subsidiary
(7) $15 of retention payments related to the merger
(8) $253 in out of period fuel hedges
(9) $333 tax charge related to impairment of goodwill and intangible
assets
DELTA AIR LINES, INC.
Unaudited Combined Statements of Operations
-------------------------------------
Three Months Ended September 30, 2008
-------------------------------------
Special
(in millions) Delta(1) Northwest(1) Items Combined
-------- ------------ ------- --------
OPERATING REVENUE:
Passenger:
Mainline $3,921 $2,801 $- $6,722
Regional carriers 1,057 550 - 1,607
----- --- -- -----
Total passenger revenue 4,978 3,351 - 8,329
Cargo 162 202 - 364
Other, net 579 260 - 839
--- --- -- ---
Total operating revenue 5,719 3,813 - 9,532
OPERATING EXPENSE:
Aircraft fuel and related
taxes 1,952 1,946 (250)(5) 3,648
Salaries and related costs 1,086 706 (18)(2) 1,774
Contract carrier arrangements 941 275 - 1,216
Aircraft maintenance materials
and outside repairs 273 168 - 441
Contracted services 272 198 - 470
Passenger commissions and
other selling expenses 259 226 - 485
Depreciation and amortization 293 122 - 415
Landing fees and other rents 179 144 - 323
Aircraft rent 70 57 - 127
Passenger service 122 65 - 187
Restructuring and merger-related
items 24 1 (25)(3) -
Other 117 123 (10)(4) 230
--- --- --- ---
Total operating expense 5,588 4,031 (303) 9,316
----- ----- ---- -----
OPERATING INCOME (LOSS) 131 (218) 303 216
OTHER (EXPENSE) INCOME:
Interest expense (140) (112) - (252)
Interest income 21 21 - 42
Miscellaneous, net (62) (5) - (67)
--- -- -- ---
Total other expense, net (181) (96) - (277)
---- --- -- ----
LOSS BEFORE INCOME TAXES (50) (314) 303 (61)
INCOME TAX PROVISION - (3) - (3)
-- -- -- --
NET LOSS $(50) $(317) $303 $(64)
==== ===== ==== ====
Notes:
Combined Contract carrier arrangements expense includes $497 million for
fuel expense incurred under these arrangements.
(1) We reclassified prior period amounts to conform to current
presentations
(2) $18 of retention payments related to the merger
(3) $14 in contract carrier restructuring, $11 in facilities and merger
related charges
(4) $10 in merger-related charges
(5) $250 in out of period fuel hedges
07-22-2009, 04:29 AM
Happy to be here
Joined APC: Jun 2006
Position: A-320A
Posts: 18,563
Three Months
Ended
June 30, 2009
-------------
(in millions)
Net loss ($257)
Items excluded:
Restructuring and merger-related items 58
--
Net loss excluding special items ($199)
=====
Basic and diluted weighted average shares
outstanding 827
---
Basic and diluted loss per share excluding special
items ($0.24)
======
Three Months
Ended
(in millions) June 30, 2009
-------------
Net loss excluding special items ($199)
Items excluded:
Fuel hedge losses on contracts that settled
in 2009 390
---
Net profit excluding fuel hedge losses and
special items $191
====
Three Months
Ended
(in millions) June 30, 2009
-------------
GAAP Net cash provided by operating activities $834
GAAP Net cash used in investing activities (132)
Adjustments:
Change in short-term investments 73
Aircraft purchases under seller financing (266)
----
Total free cash flow $509
====
Three Months
Ended
(in millions) June 30, 2009
-------------
Net cash used in investing activities (GAAP) ($132)
Adjustments:
Change in short-term investments 73
Aircraft purchases under seller financing (266)
----
Net investing activities ($325)
Three Months Ended June 30,
---------------------------
(in millions) 2009 2008
---- ----
GAAP GAAP
---- ----
Operating expense $6,999 $6,586
Items excluded:
Impairment of goodwill and other assets - (1,196)
Restructuring and merger-related items (58) (104)
--- ----
Operating expense excluding special items $6,941 $5,286
====== ======
Three Months
Ended
June 30, 2009
-------------
(in millions)
Payments on long-term debt and capital lease
obligations ($355)
Adjustment:
Payments on accounts receivable financing facility (45)
---
Total debt and capital lease payments ($400)
=====
Three Months
Ended
June 30, 2009
-------------
(in millions)
Proceeds from long-term obligations $64
Adjustments:
Aircraft purchases under seller financing 266
---
Total issuance of debt $330
====
Three Months Ended
June 30, 2008
(in millions, except ------------------------- Passenger
unit data) Delta Northwest Combined Mile Yield PRASM
----- --------- -------- ---------- -----
Passenger and operating
revenue
Domestic $2,071 $1,550 $3,621 14.04 cents 12.08 cents
Atlantic 1,141 464 1,605 13.10 10.85
Latin America 333 32 365 13.05 10.36
Pacific 82 592 674 11.87 10.11
-- --- ---
Total mainline 3,627 2,638 6,265 13.47 11.40
Regional carriers 1,143 506 1,649 24.52 19.54
----- --- -----
Total passenger revenue 4,770 3,144 7,914 14.87 12.48
Cargo 160 213 373
Other, net 569 232 801
--- --- ---
Total operating
revenue $5,499 $3,589 $9,088
====== ====== ======
Ended
June 30, 2009
-------------
(in millions)
Net loss ($257)
Items excluded:
Restructuring and merger-related items 58
--
Net loss excluding special items ($199)
=====
Basic and diluted weighted average shares
outstanding 827
---
Basic and diluted loss per share excluding special
items ($0.24)
======
Three Months
Ended
(in millions) June 30, 2009
-------------
Net loss excluding special items ($199)
Items excluded:
Fuel hedge losses on contracts that settled
in 2009 390
---
Net profit excluding fuel hedge losses and
special items $191
====
Three Months
Ended
(in millions) June 30, 2009
-------------
GAAP Net cash provided by operating activities $834
GAAP Net cash used in investing activities (132)
Adjustments:
Change in short-term investments 73
Aircraft purchases under seller financing (266)
----
Total free cash flow $509
====
Three Months
Ended
(in millions) June 30, 2009
-------------
Net cash used in investing activities (GAAP) ($132)
Adjustments:
Change in short-term investments 73
Aircraft purchases under seller financing (266)
----
Net investing activities ($325)
Three Months Ended June 30,
---------------------------
(in millions) 2009 2008
---- ----
GAAP GAAP
---- ----
Operating expense $6,999 $6,586
Items excluded:
Impairment of goodwill and other assets - (1,196)
Restructuring and merger-related items (58) (104)
--- ----
Operating expense excluding special items $6,941 $5,286
====== ======
Three Months
Ended
June 30, 2009
-------------
(in millions)
Payments on long-term debt and capital lease
obligations ($355)
Adjustment:
Payments on accounts receivable financing facility (45)
---
Total debt and capital lease payments ($400)
=====
Three Months
Ended
June 30, 2009
-------------
(in millions)
Proceeds from long-term obligations $64
Adjustments:
Aircraft purchases under seller financing 266
---
Total issuance of debt $330
====
Three Months Ended
June 30, 2008
(in millions, except ------------------------- Passenger
unit data) Delta Northwest Combined Mile Yield PRASM
----- --------- -------- ---------- -----
Passenger and operating
revenue
Domestic $2,071 $1,550 $3,621 14.04 cents 12.08 cents
Atlantic 1,141 464 1,605 13.10 10.85
Latin America 333 32 365 13.05 10.36
Pacific 82 592 674 11.87 10.11
-- --- ---
Total mainline 3,627 2,638 6,265 13.47 11.40
Regional carriers 1,143 506 1,649 24.52 19.54
----- --- -----
Total passenger revenue 4,770 3,144 7,914 14.87 12.48
Cargo 160 213 373
Other, net 569 232 801
--- --- ---
Total operating
revenue $5,499 $3,589 $9,088
====== ====== ======
07-22-2009, 04:31 AM
Happy to be here
Joined APC: Jun 2006
Position: A-320A
Posts: 18,563
Six Months Ended
June 30, 2008
------------------------- Passenger
Delta Northwest Combined Mile Yield PRASM
----- --------- -------- ---------- -----
Passenger revenue
$8,870 $5,852 $14,722 14.61 cents 11.97 cents
====== ====== =======
Three Months Ended June 30,
---------------------------
2009 2008 2008
---- ---- ----
GAAP Combined GAAP
---- -------- ----
Consolidated CASM 11.86 cents 16.52 cents 17.00 cents
Transactions with third parties
and other (including fuel) (0.31) (0.53) (0.34)
----- ----- -----
CASM excluding items not
related to generation of a
seat mile 11.55 cents 15.99 cents 16.66 cents
Items excluded:
Impairment of goodwill and
other assets - (2.75) (3.09)
Restructuring and merger-
related items (0.10) (0.21) (0.27)
MTM adjustments to fuel
hedges settling in future
periods - 0.40 -
-- ---- --
CASM excluding special items 11.45 cents 13.43 cents 13.30 cents
Fuel expense and related taxes
(excluding fuel related to
transactions with third
parties) (3.39) (5.55) (5.32)
----- ----- -----
CASM excluding fuel expense
and related taxes and special
items 8.06 cents 7.88 cents 7.98 cents
==== ==== ====
ASMs 59,029 63,399 38,736
====== ====== ======
Three Months Ended June 30,
---------------------------
2009 2008 2008
---- ---- ----
GAAP Combined GAAP
---- -------- ----
Consolidated operating expense 6,999 10,474 6,586
Less regional carriers
operating expense (1,452) (1,846) (1,344)
------ ------ ------
Mainline operating expense 5,547 8,628 5,242
===== ===== =====
Mainline CASM 10.96 cents 15.70 cents 15.93 cents
Transactions with third
parties and other (including
fuel) (0.34) (0.62) (0.41)
----- ----- -----
Mainline CASM excluding items
not related to generation of
a seat mile 10.62 cents 15.08 cents 15.52 cents
Items excluded:
Impairment of goodwill and
other assets - (3.18) (3.63)
Restructuring and merger-
related items (0.11) (0.24) (0.32)
MTM adjustments to fuel
hedges settling in future
periods - 0.46 -
-- ---- --
Mainline CASM excluding
special items 10.51 cents 12.12 cents 11.57 cents
Fuel expense and related
taxes (excluding fuel
related to transactions
with third parties) (3.31) (5.06) (4.69)
----- ----- -----
Mainline CASM excluding
fuel expense and related
taxes and special items 7.20 cents 7.06 cents 6.88 cents
==== ==== ====
ASMs 50,605 54,960 32,902
====== ====== ======
Six Months Ended June 30,
-------------------------
2009 2008
---- ----
GAAP Combined
---- --------
CASM 12.34 cents 23.33 cents
Transactions with third parties and
other (including fuel) (0.32) (0.52)
----- -----
CASM excluding items not related to
generation of a seat mile 12.02 cents 22.81 cents
Items excluded:
Impairment of goodwill and other assets - (9.58)
Restructuring and merger-related items (0.14) (0.13)
MTM adjustments to fuel hedges settling
in future periods - 0.21
-- ----
CASM excluding special items 11.88 cents 13.31 cents
Fuel expense and related taxes (excluding
fuel related to transactions with third
parties) (3.53) (5.19)
----- -----
CASM excluding fuel expense and related
taxes and special items 8.35 cents 8.12 cents
==== ====
ASMs 114,769 122,974
======= =======
Six Months Ended June 30,
-------------------------
2009 2008
---- ----
GAAP Combined
---- --------
Consolidated operating expense 14,166 28,688
Less regional carriers operating expense (2,820) (3,588)
------ ------
Mainline operating expense 11,346 25,100
====== ======
Mainline CASM 11.53 cents 23.57 cents
Transactions with third parties and other
(including fuel) (0.39) (0.62)
----- -----
Mainline CASM excluding items not related
to generation of a seat mile 11.14 cents 22.95 cents
Items excluded:
Impairment of goodwill and other assets - (11.06)
Restructuring and merger-related items (0.15) (0.15)
MTM adjustments to fuel hedges settling
in future periods - 0.24
-- ----
Mainline CASM excluding special items 10.99 cents 11.98 cents
Fuel expense and related taxes (excluding
fuel related to transactions with third
parties) (3.51) (4.75)
----- -----
Mainline CASM excluding fuel expense and
related taxes and special items 7.48 cents 7.23 cents
==== ====
ASMs 98,369 106,499
====== =======
June 30, 2008
------------------------- Passenger
Delta Northwest Combined Mile Yield PRASM
----- --------- -------- ---------- -----
Passenger revenue
$8,870 $5,852 $14,722 14.61 cents 11.97 cents
====== ====== =======
Three Months Ended June 30,
---------------------------
2009 2008 2008
---- ---- ----
GAAP Combined GAAP
---- -------- ----
Consolidated CASM 11.86 cents 16.52 cents 17.00 cents
Transactions with third parties
and other (including fuel) (0.31) (0.53) (0.34)
----- ----- -----
CASM excluding items not
related to generation of a
seat mile 11.55 cents 15.99 cents 16.66 cents
Items excluded:
Impairment of goodwill and
other assets - (2.75) (3.09)
Restructuring and merger-
related items (0.10) (0.21) (0.27)
MTM adjustments to fuel
hedges settling in future
periods - 0.40 -
-- ---- --
CASM excluding special items 11.45 cents 13.43 cents 13.30 cents
Fuel expense and related taxes
(excluding fuel related to
transactions with third
parties) (3.39) (5.55) (5.32)
----- ----- -----
CASM excluding fuel expense
and related taxes and special
items 8.06 cents 7.88 cents 7.98 cents
==== ==== ====
ASMs 59,029 63,399 38,736
====== ====== ======
Three Months Ended June 30,
---------------------------
2009 2008 2008
---- ---- ----
GAAP Combined GAAP
---- -------- ----
Consolidated operating expense 6,999 10,474 6,586
Less regional carriers
operating expense (1,452) (1,846) (1,344)
------ ------ ------
Mainline operating expense 5,547 8,628 5,242
===== ===== =====
Mainline CASM 10.96 cents 15.70 cents 15.93 cents
Transactions with third
parties and other (including
fuel) (0.34) (0.62) (0.41)
----- ----- -----
Mainline CASM excluding items
not related to generation of
a seat mile 10.62 cents 15.08 cents 15.52 cents
Items excluded:
Impairment of goodwill and
other assets - (3.18) (3.63)
Restructuring and merger-
related items (0.11) (0.24) (0.32)
MTM adjustments to fuel
hedges settling in future
periods - 0.46 -
-- ---- --
Mainline CASM excluding
special items 10.51 cents 12.12 cents 11.57 cents
Fuel expense and related
taxes (excluding fuel
related to transactions
with third parties) (3.31) (5.06) (4.69)
----- ----- -----
Mainline CASM excluding
fuel expense and related
taxes and special items 7.20 cents 7.06 cents 6.88 cents
==== ==== ====
ASMs 50,605 54,960 32,902
====== ====== ======
Six Months Ended June 30,
-------------------------
2009 2008
---- ----
GAAP Combined
---- --------
CASM 12.34 cents 23.33 cents
Transactions with third parties and
other (including fuel) (0.32) (0.52)
----- -----
CASM excluding items not related to
generation of a seat mile 12.02 cents 22.81 cents
Items excluded:
Impairment of goodwill and other assets - (9.58)
Restructuring and merger-related items (0.14) (0.13)
MTM adjustments to fuel hedges settling
in future periods - 0.21
-- ----
CASM excluding special items 11.88 cents 13.31 cents
Fuel expense and related taxes (excluding
fuel related to transactions with third
parties) (3.53) (5.19)
----- -----
CASM excluding fuel expense and related
taxes and special items 8.35 cents 8.12 cents
==== ====
ASMs 114,769 122,974
======= =======
Six Months Ended June 30,
-------------------------
2009 2008
---- ----
GAAP Combined
---- --------
Consolidated operating expense 14,166 28,688
Less regional carriers operating expense (2,820) (3,588)
------ ------
Mainline operating expense 11,346 25,100
====== ======
Mainline CASM 11.53 cents 23.57 cents
Transactions with third parties and other
(including fuel) (0.39) (0.62)
----- -----
Mainline CASM excluding items not related
to generation of a seat mile 11.14 cents 22.95 cents
Items excluded:
Impairment of goodwill and other assets - (11.06)
Restructuring and merger-related items (0.15) (0.15)
MTM adjustments to fuel hedges settling
in future periods - 0.24
-- ----
Mainline CASM excluding special items 10.99 cents 11.98 cents
Fuel expense and related taxes (excluding
fuel related to transactions with third
parties) (3.51) (4.75)
----- -----
Mainline CASM excluding fuel expense and
related taxes and special items 7.48 cents 7.23 cents
==== ====
ASMs 98,369 106,499
====== =======
07-22-2009, 04:33 AM
Gets Weekends Off
Joined APC: Oct 2008
Posts: 309
Wow! I was expecting much worse.
Does being satisfied with results that show my company losing millions of dollars mean I'm ready for management?
Does being satisfied with results that show my company losing millions of dollars mean I'm ready for management?
07-22-2009, 04:42 AM
New Hire
Joined APC: Aug 2008
Position: 73CA
Posts: 4
The bottom line DAL put $500 million in the bank 
and debt and leases went down $20 million . Now lets see what the 3rd qrtr brings.
and debt and leases went down $20 million . Now lets see what the 3rd qrtr brings.
07-22-2009, 04:45 AM
Happy to be here
Joined APC: Jun 2006
Position: A-320A
Posts: 18,563
Yes, overall I am very happy with these numbers. I think that our yield has begun to stabilize and that means that we will be able to start charging a little more here and there for tickets. We have seen that happening already.
Must have gotten rid of an RJ on our balance sheet.....
Must have gotten rid of an RJ on our balance sheet.....
07-22-2009, 04:57 AM
Gets Weekends Off
Joined APC: Feb 2008
Posts: 354
Again...I am ignorant when it comes to these numbers, BUT, Why do airlines always say, "Well, we lost 290 Million this quarter, but hey, if we didn't have to buy fuel and paint airplanes we would have made 191 Million?"
I know yield is down 26%, but shouldn't there be a time when you raise prices, accept lower load factors and still make money?
I suck at this business stuff. I had one of those HOT Auburn girls sitting next to me in that class!!!
I know yield is down 26%, but shouldn't there be a time when you raise prices, accept lower load factors and still make money?
I suck at this business stuff. I had one of those HOT Auburn girls sitting next to me in that class!!!
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