Delta 3rd quarter loss
10-22-2009 | 03:58 AM
#1
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Weekend and Holiday Pilot
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From: Sippin' at the Troubadour
Delta 3rd quarter loss
WASHINGTON, Oct 22 (Reuters) - Delta Air Lines Inc (DAL.N), the world's biggest airline, reported a quarterly net loss on Thursday due to special charges, but operating earnings beat Wall Street expectations.
Delta, which merged with Northwest Airlines last year, said its loss was $161 million, or 19 cents per share, including $212 million in special charges.
Excluding the charges, the company reported a profit of 6 cents per share. Analysts on average had expected a loss of 5 cents per share, according to Thomson Reuters I/B/E/S. (Reporting by John Crawley; editing by John Wallace)
Did we lose on fuel hedges again?
Delta, which merged with Northwest Airlines last year, said its loss was $161 million, or 19 cents per share, including $212 million in special charges.
Excluding the charges, the company reported a profit of 6 cents per share. Analysts on average had expected a loss of 5 cents per share, according to Thomson Reuters I/B/E/S. (Reporting by John Crawley; editing by John Wallace)
Did we lose on fuel hedges again?
10-22-2009 | 04:11 AM
#2
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One of these days....
Sometimes I feel like we are just slaves to the Oil Speculation Machine.
Hopefully our government will one day step in and do something about it, but I doubt it, not as long as the kickbacks and backdoor politics remain alive and well.
Sometimes I feel like we are just slaves to the Oil Speculation Machine.
Hopefully our government will one day step in and do something about it, but I doubt it, not as long as the kickbacks and backdoor politics remain alive and well.
10-22-2009 | 04:19 AM
#3
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From: A-320A
ATLANTA, Oct. 22 /PRNewswire-FirstCall/ -- Delta Air Lines (NYSE: DAL) today reported financial results for the September 2009 quarter. Key points include:
• Delta's net income for the September 2009 quarter was $51 million, or $0.06 per share, excluding $212 million in special items(1). This result is $115 million better than prior year on a combined basis(2).
• Delta's reported net loss for the September 2009 quarter was $161 million, or $0.19 per share.
• Delta raised $600 million in incremental liquidity, addressed 40% of 2010 debt maturities and ended the September 2009 quarter with $5.8 billion in unrestricted liquidity.
• Delta has achieved $500 million in merger benefits in the first three quarters of 2009, reaching its 2009 target ahead of plan.
• Delta's 2010 system capacity is expected to decline approximately 3% compared to 2009.
"Our ability to earn a profit for the quarter shows we are making sound decisions for our business in this difficult economic environment. While we now see encouraging revenue and booking trends, we remain cautious in these early stages of an uncertain recovery," said Richard Anderson, Delta's chief executive officer. "My thanks go out to the Delta people who delivered great customer service, ran a solid operation, and moved forward with our merger integration, all against the backdrop of a very challenging economy."
(Logo: http://www.newscom.com/cgi-bin/prnh/20090202/DELTALOGO )
Revenue Environment
Delta's operating revenue on a GAAP(3) basis grew 32% to $7.6 billion in the September 2009 quarter compared to the prior year period as a result of its merger with Northwest Airlines. On a combined basis, total operating revenue declined $2.0 billion, or 21%, and total unit revenue (RASM) declined 17%.
On a combined basis:
• Total operating revenue declined 21% versus prior year due to the global economic recession.
• Passenger revenue decreased 22%, or $1.8 billion, compared to the prior year period due to the global economic recession and a 4% capacity reduction. Passenger unit revenue (PRASM) declined 18%, driven by a 19% decline in yield.
• Cargo revenue declined 51%, or $187 million, reflecting lower volume and yields. Freighter capacity was 38% lower year over year as a result of the actions Delta is taking to discontinue freighter flying by the end of 2009.
• Other, net revenue grew 4%, or $34 million, primarily due to increased baggage fee revenue.
Comparisons of revenue-related statistics are as follows:
• Delta's net income for the September 2009 quarter was $51 million, or $0.06 per share, excluding $212 million in special items(1). This result is $115 million better than prior year on a combined basis(2).
• Delta's reported net loss for the September 2009 quarter was $161 million, or $0.19 per share.
• Delta raised $600 million in incremental liquidity, addressed 40% of 2010 debt maturities and ended the September 2009 quarter with $5.8 billion in unrestricted liquidity.
• Delta has achieved $500 million in merger benefits in the first three quarters of 2009, reaching its 2009 target ahead of plan.
• Delta's 2010 system capacity is expected to decline approximately 3% compared to 2009.
"Our ability to earn a profit for the quarter shows we are making sound decisions for our business in this difficult economic environment. While we now see encouraging revenue and booking trends, we remain cautious in these early stages of an uncertain recovery," said Richard Anderson, Delta's chief executive officer. "My thanks go out to the Delta people who delivered great customer service, ran a solid operation, and moved forward with our merger integration, all against the backdrop of a very challenging economy."
(Logo: http://www.newscom.com/cgi-bin/prnh/20090202/DELTALOGO )
Revenue Environment
Delta's operating revenue on a GAAP(3) basis grew 32% to $7.6 billion in the September 2009 quarter compared to the prior year period as a result of its merger with Northwest Airlines. On a combined basis, total operating revenue declined $2.0 billion, or 21%, and total unit revenue (RASM) declined 17%.
On a combined basis:
• Total operating revenue declined 21% versus prior year due to the global economic recession.
• Passenger revenue decreased 22%, or $1.8 billion, compared to the prior year period due to the global economic recession and a 4% capacity reduction. Passenger unit revenue (PRASM) declined 18%, driven by a 19% decline in yield.
• Cargo revenue declined 51%, or $187 million, reflecting lower volume and yields. Freighter capacity was 38% lower year over year as a result of the actions Delta is taking to discontinue freighter flying by the end of 2009.
• Other, net revenue grew 4%, or $34 million, primarily due to increased baggage fee revenue.
Comparisons of revenue-related statistics are as follows:
10-22-2009 | 04:19 AM
#4
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On a combined basis:
• Both consolidated and mainline unit cost (CASM(4)), excluding fuel expense and special items, increased 2% year over year in the September 2009 quarter due to higher pension expense.
• Non-operating expenses excluding special items increased $23 million in the September 2009 quarter primarily due to non-cash debt discount amortization.
"Despite our significant capacity reductions, Delta successfully mitigated unit cost pressures through improved productivity, strong cost discipline and accelerating our merger synergies," said Hank Halter, chief financial officer. "While we have additional cost pressures in the fourth quarter from new capacity reductions, we expect to offset most, if not all, of this impact."
Liquidity Position
As of Sept. 30, 2009, Delta had $5.8 billion in unrestricted liquidity, including $5.5 billion in cash, cash equivalents and short-term investments and $300 million available in an undrawn revolving credit facility.
During the September 2009 quarter, Delta completed $2.1 billion in new financing transactions, addressing 40% of 2010 debt maturities and generating $600 million in incremental liquidity. The new financing consisted of $1.35 billion of secured notes, a $500 million revolving credit facility and a $250 million term loan facility, all of which were secured by the airline's Pacific routes and related assets.
During the quarter, the company made $1.2 billion of debt and capital lease payments which includes $900 million for the Northwest bank credit facility. In addition the company amended Northwest's revolving credit facility to reduce the total borrowing capacity from $500 million to $300 million.
Capital expenditures during the quarter were approximately $150 million, which includes $75 million for investments in aircraft, parts and modifications.
Merger with Northwest
Through the first three quarters of 2009, Delta has achieved $500 million in synergy benefits from its merger with Northwest Airlines, reaching its 2009 target ahead of plan. The company now expects to generate $700 million in total merger synergies in 2009. Synergies achieved to date include improved revenue from increased market share and Delta's affinity card agreement. In addition, cost reductions have been achieved from streamlined overhead, facilities and technology, elimination of dedicated freighter flying and supply chain savings.
The company is on track in its integration efforts and expects to obtain a Single Operating Certificate by the end of 2009. Recent achievements include:
• Creating the world's largest airline loyalty program by combining the Northwest WorldPerks program and Delta SkyMiles;
• Relocating the Northwest System Operations Center from Minneapolis to Delta's Operations Control Center in Atlanta;
• Transitioning reservations agents in five pre-merger Northwest call centers to the Delta Reservations system;
• Continuing pilot and flight attendant training to prepare for single carrier operations;
• Renegotiating more than 600 corporate contracts to date, generating incremental business traffic;
• Re-branding more than 240 airports to provide consistent Delta branding at more than 98% of airports served worldwide; and
• Painting more than 230 pre-merger Northwest aircraft in the Delta livery.
Fuel Price and Related Hedges
Delta hedged 53% of its fuel consumption for the September 2009 quarter, which resulted in $226 million in realized fuel hedge losses and premiums for the period. As a result, Delta's average fuel price(5) for the September 2009 quarter was $2.13 per gallon, which includes $0.11 per gallon associated with fuel hedge losses.
The table below represents the fuel hedges Delta had in place as of Oct. 16, 2009:
4Q09 1Q10 2Q10 3Q10
----------------------------------
Call options 22% 24% 11% 3%
Collars - 3% - -
Swaps 17% 1% - -
----------------------------------
Total 39% 28% 11% 3%
----------------------------------
Avg. crude call strike $82 $67 $68 $91
Avg crude collar cap - 68 - -
Avg crude collar floor - 60 - -
Avg. crude swap $63 $69 - -
• Both consolidated and mainline unit cost (CASM(4)), excluding fuel expense and special items, increased 2% year over year in the September 2009 quarter due to higher pension expense.
• Non-operating expenses excluding special items increased $23 million in the September 2009 quarter primarily due to non-cash debt discount amortization.
"Despite our significant capacity reductions, Delta successfully mitigated unit cost pressures through improved productivity, strong cost discipline and accelerating our merger synergies," said Hank Halter, chief financial officer. "While we have additional cost pressures in the fourth quarter from new capacity reductions, we expect to offset most, if not all, of this impact."
Liquidity Position
As of Sept. 30, 2009, Delta had $5.8 billion in unrestricted liquidity, including $5.5 billion in cash, cash equivalents and short-term investments and $300 million available in an undrawn revolving credit facility.
During the September 2009 quarter, Delta completed $2.1 billion in new financing transactions, addressing 40% of 2010 debt maturities and generating $600 million in incremental liquidity. The new financing consisted of $1.35 billion of secured notes, a $500 million revolving credit facility and a $250 million term loan facility, all of which were secured by the airline's Pacific routes and related assets.
During the quarter, the company made $1.2 billion of debt and capital lease payments which includes $900 million for the Northwest bank credit facility. In addition the company amended Northwest's revolving credit facility to reduce the total borrowing capacity from $500 million to $300 million.
Capital expenditures during the quarter were approximately $150 million, which includes $75 million for investments in aircraft, parts and modifications.
Merger with Northwest
Through the first three quarters of 2009, Delta has achieved $500 million in synergy benefits from its merger with Northwest Airlines, reaching its 2009 target ahead of plan. The company now expects to generate $700 million in total merger synergies in 2009. Synergies achieved to date include improved revenue from increased market share and Delta's affinity card agreement. In addition, cost reductions have been achieved from streamlined overhead, facilities and technology, elimination of dedicated freighter flying and supply chain savings.
The company is on track in its integration efforts and expects to obtain a Single Operating Certificate by the end of 2009. Recent achievements include:
• Creating the world's largest airline loyalty program by combining the Northwest WorldPerks program and Delta SkyMiles;
• Relocating the Northwest System Operations Center from Minneapolis to Delta's Operations Control Center in Atlanta;
• Transitioning reservations agents in five pre-merger Northwest call centers to the Delta Reservations system;
• Continuing pilot and flight attendant training to prepare for single carrier operations;
• Renegotiating more than 600 corporate contracts to date, generating incremental business traffic;
• Re-branding more than 240 airports to provide consistent Delta branding at more than 98% of airports served worldwide; and
• Painting more than 230 pre-merger Northwest aircraft in the Delta livery.
Fuel Price and Related Hedges
Delta hedged 53% of its fuel consumption for the September 2009 quarter, which resulted in $226 million in realized fuel hedge losses and premiums for the period. As a result, Delta's average fuel price(5) for the September 2009 quarter was $2.13 per gallon, which includes $0.11 per gallon associated with fuel hedge losses.
The table below represents the fuel hedges Delta had in place as of Oct. 16, 2009:
4Q09 1Q10 2Q10 3Q10
----------------------------------
Call options 22% 24% 11% 3%
Collars - 3% - -
Swaps 17% 1% - -
----------------------------------
Total 39% 28% 11% 3%
----------------------------------
Avg. crude call strike $82 $67 $68 $91
Avg crude collar cap - 68 - -
Avg crude collar floor - 60 - -
Avg. crude swap $63 $69 - -
10-22-2009 | 04:20 AM
#5
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September 2009 Quarter Highlights
During the September 2009 quarter, Delta continued to position itself as the world's No. 1 airline, with an ongoing commitment to employees, customers and communities. Highlights include:
• Paying more than $50 million year-to-date in employee Shared Rewards for achieving operational performance goals;
• Reaching a definitive agreement with US Airways to exchange slots and airport facilities at New York's LaGuardia and Washington's Reagan National airports, subject to regulatory approval, which will enable Delta to serve an additional two million customers at LaGuardia annually without added congestion;
• Partnering with the City of Atlanta to reach an agreement to extend Delta's lease at Hartsfield-Jackson Atlanta International Airport through 2017 to maintain the airport's position as the leading airport in the world;
• Enhancing BusinessElite service from New York by adding full-flat beds to all flights between New York-JFK and London-Heathrow and new BusinessElite service flights connecting New York-JFK to Los Angeles and San Francisco;
• Announcing the 2010 SkyMiles Medallion program offering frequent flyers new, industry-leading benefits including a Diamond level status and rollover Medallion Qualification Miles; and
• Launching the first joint Delta and Northwest Habitat for Humanity build in the U.S. with projects in Atlanta, Cincinnati, Detroit, Memphis, Minneapolis/St. Paul and New York and partnering - for the fifth consecutive year - with the Breast Cancer Research Foundation to add to the nearly $1.5 million previously raised through on-board pink product sales and donations.
Special Items
Delta recorded special charges totaling $212 million in the September 2009 quarter, including:
• $83 million to write-off unamortized non-cash debt discount associated with the refinancing of certain Northwest debt;
• $78 million in merger-related items; and
• $51 million in charges for employee severance programs.
Delta recorded special charges totaling $24 million in the September 2008 quarter, including:
• A $14 million charge for early termination fees under contract carrier arrangements;
• $7 million in merger-related expenses; and
• A $3 million net charge primarily for facilities restructuring and severance.
During the September 2009 quarter, Delta continued to position itself as the world's No. 1 airline, with an ongoing commitment to employees, customers and communities. Highlights include:
• Paying more than $50 million year-to-date in employee Shared Rewards for achieving operational performance goals;
• Reaching a definitive agreement with US Airways to exchange slots and airport facilities at New York's LaGuardia and Washington's Reagan National airports, subject to regulatory approval, which will enable Delta to serve an additional two million customers at LaGuardia annually without added congestion;
• Partnering with the City of Atlanta to reach an agreement to extend Delta's lease at Hartsfield-Jackson Atlanta International Airport through 2017 to maintain the airport's position as the leading airport in the world;
• Enhancing BusinessElite service from New York by adding full-flat beds to all flights between New York-JFK and London-Heathrow and new BusinessElite service flights connecting New York-JFK to Los Angeles and San Francisco;
• Announcing the 2010 SkyMiles Medallion program offering frequent flyers new, industry-leading benefits including a Diamond level status and rollover Medallion Qualification Miles; and
• Launching the first joint Delta and Northwest Habitat for Humanity build in the U.S. with projects in Atlanta, Cincinnati, Detroit, Memphis, Minneapolis/St. Paul and New York and partnering - for the fifth consecutive year - with the Breast Cancer Research Foundation to add to the nearly $1.5 million previously raised through on-board pink product sales and donations.
Special Items
Delta recorded special charges totaling $212 million in the September 2009 quarter, including:
• $83 million to write-off unamortized non-cash debt discount associated with the refinancing of certain Northwest debt;
• $78 million in merger-related items; and
• $51 million in charges for employee severance programs.
Delta recorded special charges totaling $24 million in the September 2008 quarter, including:
• A $14 million charge for early termination fees under contract carrier arrangements;
• $7 million in merger-related expenses; and
• A $3 million net charge primarily for facilities restructuring and severance.
10-22-2009 | 04:20 AM
#6
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• A $3 million net charge primarily for facilities restructuring and severance.
December 2009 Quarter Guidance
Delta's projections for the December 2009 quarter are below. This guidance is presented on a combined basis(6).
4Q 2009 Forecast 2009 Forecast
---------------- -------------
Fuel price, including taxes and
hedges $2.14 $2.14
Operating margin Breakeven Breakeven
Capital expenditures $250 million $1.4 billion
Total liquidity as of Dec. 31, 2009 $5.0 billion
4Q 2009 Forecast
(compared to 4Q
2008) 2009 vs. 2008
---------------- -------------
Consolidated unit costs - excluding
fuel expense Up 3 - 4% Up 2 - 3%
Mainline unit costs - excluding fuel
expense Up 3 - 4% Up 2 - 3%
System capacity Down 9 - 11% Down 7 - 9%
Domestic Down 5 - 7% Down 7 - 9%
International Down 14 - 16% Down 7 - 9%
Mainline capacity Down 9 - 11% Down 7 - 9%
Domestic Down 6 - 8% Down 7 - 9%
International Down 14 - 16% Down 6 - 8%
Other Matters
Included with this press release are Delta's Consolidated Statements of Operations for the three and nine months ended Sept. 30, 2009 and 2008; a statistical summary for those periods; selected balance sheet data as of Sept. 30, 2009 and Dec. 31, 2008; and a reconciliation of certain non-GAAP financial measures.
About Delta
Delta Air Lines is the world's No. 1 airline. From its hubs in Atlanta, Cincinnati, Detroit, Memphis, Minneapolis-St. Paul, New York-JFK, Salt Lake City, Paris-Charles de Gaulle, Amsterdam and Tokyo-Narita, Delta, its Northwest subsidiary and Delta Connection carriers offer service to 355 destinations in 64 countries and serve more than 170 million passengers each year. Delta's marketing alliances allow customers to earn and redeem SkyMiles on more than 16,000 daily flights offered by SkyTeam and other partners. Delta's more than 70,000 employees worldwide are reshaping the aviation industry as the only U.S. airline to offer a full global network. Customers can check in for flights, print boarding passes, check bags and flight status at delta.com.
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. Combined financial information includes the combined results of Delta and Northwest for the September 2008 quarter.
3. 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 September 2009 quarter, but only Delta standalone results for the September 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 September 2009 quarter to the combined results of Delta and Northwest for the September 2008 quarter.
4. Delta excludes from mainline unit cost ancillary businesses not related to the generation of a seat mile, including Delta's providing maintenance and staffing services to third parties, dedicated freighter operations and Delta's vacation wholesale operations. 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 September 2009 quarter average fuel price of $2.13 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.
Submission of Stockholder Proposals
To be considered for inclusion in the Delta proxy statement for the 2010 annual meeting, stockholder proposals must be submitted in writing and received no later than 5:00 p.m., local time, on Dec. 30, 2009 at
December 2009 Quarter Guidance
Delta's projections for the December 2009 quarter are below. This guidance is presented on a combined basis(6).
4Q 2009 Forecast 2009 Forecast
---------------- -------------
Fuel price, including taxes and
hedges $2.14 $2.14
Operating margin Breakeven Breakeven
Capital expenditures $250 million $1.4 billion
Total liquidity as of Dec. 31, 2009 $5.0 billion
4Q 2009 Forecast
(compared to 4Q
2008) 2009 vs. 2008
---------------- -------------
Consolidated unit costs - excluding
fuel expense Up 3 - 4% Up 2 - 3%
Mainline unit costs - excluding fuel
expense Up 3 - 4% Up 2 - 3%
System capacity Down 9 - 11% Down 7 - 9%
Domestic Down 5 - 7% Down 7 - 9%
International Down 14 - 16% Down 7 - 9%
Mainline capacity Down 9 - 11% Down 7 - 9%
Domestic Down 6 - 8% Down 7 - 9%
International Down 14 - 16% Down 6 - 8%
Other Matters
Included with this press release are Delta's Consolidated Statements of Operations for the three and nine months ended Sept. 30, 2009 and 2008; a statistical summary for those periods; selected balance sheet data as of Sept. 30, 2009 and Dec. 31, 2008; and a reconciliation of certain non-GAAP financial measures.
About Delta
Delta Air Lines is the world's No. 1 airline. From its hubs in Atlanta, Cincinnati, Detroit, Memphis, Minneapolis-St. Paul, New York-JFK, Salt Lake City, Paris-Charles de Gaulle, Amsterdam and Tokyo-Narita, Delta, its Northwest subsidiary and Delta Connection carriers offer service to 355 destinations in 64 countries and serve more than 170 million passengers each year. Delta's marketing alliances allow customers to earn and redeem SkyMiles on more than 16,000 daily flights offered by SkyTeam and other partners. Delta's more than 70,000 employees worldwide are reshaping the aviation industry as the only U.S. airline to offer a full global network. Customers can check in for flights, print boarding passes, check bags and flight status at delta.com.
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. Combined financial information includes the combined results of Delta and Northwest for the September 2008 quarter.
3. 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 September 2009 quarter, but only Delta standalone results for the September 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 September 2009 quarter to the combined results of Delta and Northwest for the September 2008 quarter.
4. Delta excludes from mainline unit cost ancillary businesses not related to the generation of a seat mile, including Delta's providing maintenance and staffing services to third parties, dedicated freighter operations and Delta's vacation wholesale operations. 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 September 2009 quarter average fuel price of $2.13 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.
Submission of Stockholder Proposals
To be considered for inclusion in the Delta proxy statement for the 2010 annual meeting, stockholder proposals must be submitted in writing and received no later than 5:00 p.m., local time, on Dec. 30, 2009 at
10-22-2009 | 04:21 AM
#7
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Forward-looking Statements
Statements in this news release that are not historical facts, including statements regarding our estimates, expectations, beliefs, intentions, projections or strategies for the future, may be "forward-looking statements" as defined in the Private Securities Litigation Reform Act of 1995. All forward-looking statements involve a number of risks and uncertainties that could cause actual results to differ materially from the estimates, expectations, beliefs, intentions, projections and strategies reflected in or suggested by the forward-looking statements. These risks and uncertainties include, but are not limited to, the cost of aircraft fuel; the effects of the global recession; the effects of the global financial crisis; the impact of posting collateral in connection with our fuel hedge contracts; the impact that our indebtedness will have on our financial and operating activities and our ability to incur additional debt; the restrictions that financial covenants in our financing agreements will have on our financial and business operations; labor issues; the ability to realize the anticipated benefits of our merger with Northwest; the integration of the Delta and Northwest workforces; interruptions or disruptions in service at one of our hub airports; our increasing dependence on technology in its operations; our ability to retain management and key employees; the ability of our credit card processors to take significant holdbacks in certain circumstances; the effects of terrorist attacks; and competitive conditions in the airline industry.
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, 2008 and our Quarterly Report on Form 10-Q for the period ended June 30, 2009. Caution should be taken not to place undue reliance on our forward-looking statements, which represent our views only as of October 22, 2009, and which we have no current intention to update.
DELTA AIR LINES, INC.
Consolidated Statements of Operations
(Unaudited)
Three Three
Months Months
Ended Ended
(in millions, except Sept. 30, Sept. 30, $ Change % Change
per share data) 2009 2008(1) H(L) H(L)
------------------- ---- ------ --- ---
OPERATING REVENUE:
Passenger:
Mainline $5,122 $3,921 $1,201 31%
Regional
carriers 1,402 1,057 345 33%
----- ----- ---
Total passenger
revenue 6,524 4,978 1,546 31%
Cargo 177 162 15 9%
Other, net 873 579 294 51%
--- --- ---
Total operating
revenue 7,574 5,719 1,855 32%
OPERATING EXPENSE:
Aircraft fuel and
related taxes 1,973 1,952 21 1%
Salaries and related
costs 1,894 1,086 808 74%
Contract carrier
arrangements (2) 1,009 941 68 7%
Contracted services 415 272 143 53%
Depreciation and
amortization 385 293 92 31%
Aircraft maintenance
materials and
outside repairs 334 273 61 22%
Passenger
commissions and
other selling
expenses 384 259 125 48%
Landing fees and
other rents 340 179 161 90%
Passenger service 181 122 59 48%
Aircraft rent 123 70 53 76%
Restructuring and
merger-related
items 129 24 105 NM
Other 203 117 86 74%
--- --- --
Total operating
expense 7,370 5,588 1,782 32%
----- ----- -----
OPERATING INCOME 204 131 73 56%
OTHER (EXPENSE)
INCOME:
Interest expense (319) (140) (179) NM
Interest income 4 21 (17) -81%
Loss on
extinguishment of
debt (83) - (83) NM
Miscellaneous, net 15 (62) 77 NM
-- --- --
Total other expense,
net (383) (181) (202) NM
---- ---- ----
LOSS BEFORE INCOME
TAXES (179) (50) (129) NM
INCOME TAX BENEFIT 18 - 18 NM
-- --- --
NET LOSS $(161) $(50) $(111) NM
===== ==== =====
BASIC AND DILUTED LOSS
PER SHARE $(0.19) $(0.13)
====== ======
BASIC AND DILUTED
WEIGHTED AVERAGE
SHARES OUTSTANDING 828 396
=== ===
(1) Pursuant to GAAP, results for the September 2008 quarter presented
in this table reflect Delta standalone results only. See Note A for
a representation of "Combined" results for the September 2008
quarter, which includes Northwest results for that period.
(2) Contract carrier arrangements expense includes $251 million and $368
million for the three months ended September 30, 2009 and 2008,
respectively, for aircraft fuel and related taxes.
Statements in this news release that are not historical facts, including statements regarding our estimates, expectations, beliefs, intentions, projections or strategies for the future, may be "forward-looking statements" as defined in the Private Securities Litigation Reform Act of 1995. All forward-looking statements involve a number of risks and uncertainties that could cause actual results to differ materially from the estimates, expectations, beliefs, intentions, projections and strategies reflected in or suggested by the forward-looking statements. These risks and uncertainties include, but are not limited to, the cost of aircraft fuel; the effects of the global recession; the effects of the global financial crisis; the impact of posting collateral in connection with our fuel hedge contracts; the impact that our indebtedness will have on our financial and operating activities and our ability to incur additional debt; the restrictions that financial covenants in our financing agreements will have on our financial and business operations; labor issues; the ability to realize the anticipated benefits of our merger with Northwest; the integration of the Delta and Northwest workforces; interruptions or disruptions in service at one of our hub airports; our increasing dependence on technology in its operations; our ability to retain management and key employees; the ability of our credit card processors to take significant holdbacks in certain circumstances; the effects of terrorist attacks; and competitive conditions in the airline industry.
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, 2008 and our Quarterly Report on Form 10-Q for the period ended June 30, 2009. Caution should be taken not to place undue reliance on our forward-looking statements, which represent our views only as of October 22, 2009, and which we have no current intention to update.
DELTA AIR LINES, INC.
Consolidated Statements of Operations
(Unaudited)
Three Three
Months Months
Ended Ended
(in millions, except Sept. 30, Sept. 30, $ Change % Change
per share data) 2009 2008(1) H(L) H(L)
------------------- ---- ------ --- ---
OPERATING REVENUE:
Passenger:
Mainline $5,122 $3,921 $1,201 31%
Regional
carriers 1,402 1,057 345 33%
----- ----- ---
Total passenger
revenue 6,524 4,978 1,546 31%
Cargo 177 162 15 9%
Other, net 873 579 294 51%
--- --- ---
Total operating
revenue 7,574 5,719 1,855 32%
OPERATING EXPENSE:
Aircraft fuel and
related taxes 1,973 1,952 21 1%
Salaries and related
costs 1,894 1,086 808 74%
Contract carrier
arrangements (2) 1,009 941 68 7%
Contracted services 415 272 143 53%
Depreciation and
amortization 385 293 92 31%
Aircraft maintenance
materials and
outside repairs 334 273 61 22%
Passenger
commissions and
other selling
expenses 384 259 125 48%
Landing fees and
other rents 340 179 161 90%
Passenger service 181 122 59 48%
Aircraft rent 123 70 53 76%
Restructuring and
merger-related
items 129 24 105 NM
Other 203 117 86 74%
--- --- --
Total operating
expense 7,370 5,588 1,782 32%
----- ----- -----
OPERATING INCOME 204 131 73 56%
OTHER (EXPENSE)
INCOME:
Interest expense (319) (140) (179) NM
Interest income 4 21 (17) -81%
Loss on
extinguishment of
debt (83) - (83) NM
Miscellaneous, net 15 (62) 77 NM
-- --- --
Total other expense,
net (383) (181) (202) NM
---- ---- ----
LOSS BEFORE INCOME
TAXES (179) (50) (129) NM
INCOME TAX BENEFIT 18 - 18 NM
-- --- --
NET LOSS $(161) $(50) $(111) NM
===== ==== =====
BASIC AND DILUTED LOSS
PER SHARE $(0.19) $(0.13)
====== ======
BASIC AND DILUTED
WEIGHTED AVERAGE
SHARES OUTSTANDING 828 396
=== ===
(1) Pursuant to GAAP, results for the September 2008 quarter presented
in this table reflect Delta standalone results only. See Note A for
a representation of "Combined" results for the September 2008
quarter, which includes Northwest results for that period.
(2) Contract carrier arrangements expense includes $251 million and $368
million for the three months ended September 30, 2009 and 2008,
respectively, for aircraft fuel and related taxes.
10-22-2009 | 04:22 AM
#9
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From: A-320A
DELTA AIR LINES, INC.
Statistical Summary
(Unaudited)
Nine Months Ended Sept. 30,
---------------------------
2008
2009 Combined(1) Change
---- ------------- ------
Consolidated:
Revenue Passenger Miles
(millions)(2) 145,384 155,878 (6.7)%
Available Seat Miles
(millions)(2) 177,003 188,066 (5.9)%
Passenger Mile
Yield(2) 12.40 cents 14.79 cents (16.2)%
Passenger Revenue per
Available Seat Mile
(PRASM)(2) 10.19 cents 12.26 cents (16.9)%
Operating Cost Per
Available Seat Mile
(CASM)(2) 11.85 cents 19.85 cents (40.3)%
CASM excluding
Special Items(2) -
See Note A 11.69 cents 13.43 cents (13.0)%
CASM excluding
Special Items and
Fuel Expense and
Related Taxes(2,3)
- See Note A 8.16 cents 7.95 cents 2.6%
Passenger Load Factor (2) 82.1% 82.9% (0.8) pts
Fuel Gallons Consumed
(millions)(2) 2,951 3,182 (7.3)%
Average Price Per Fuel
Gallon, net of hedging
activity(2) $2.15 $3.34 (35.6)%
Number of Aircraft in
Fleet, End of Period 1,001 1,020 (19) aircraft
Full-Time Equivalent
Employees, End of
Period 81,740 85,507 (4.4)%
Mainline:
Revenue Passenger Miles
(millions) 126,169 136,551 (7.6)%
Available Seat Miles
(millions) 152,141 163,254 (6.8)%
Operating Cost Per
Available Seat Mile
(CASM) 10.92 cents 19.53 cents (44.1)%
CASM excluding
Special Items -
See Note A 10.74 cents 12.14 cents (11.5)%
CASM excluding
Special Items and
Fuel Expense and
Related Taxes -
See Note A 7.28 cents 7.08 cents 2.8%
Fuel Gallons Consumed
(millions) 2,378 2,604 (8.7)%
Average Price Per
Fuel Gallon,
net of hedging
activity $2.24 $3.32 (32.5)%
Number of Aircraft
in Fleet, End of
Period 750 770 (20) aircraft
(1) Data presented reflects operations for both Delta and Northwest for
the nine months ended Sept. 30, 2008.
(2) Data presented includes operations under our contract carrier
arrangements.
(3) Excludes $658 million and $1.4 billion, for the nine months ended
September 2009 and 2008, respectively, for fuel expense incurred under
contract carrier arrangements
Statistical Summary
(Unaudited)
Nine Months Ended Sept. 30,
---------------------------
2008
2009 Combined(1) Change
---- ------------- ------
Consolidated:
Revenue Passenger Miles
(millions)(2) 145,384 155,878 (6.7)%
Available Seat Miles
(millions)(2) 177,003 188,066 (5.9)%
Passenger Mile
Yield(2) 12.40 cents 14.79 cents (16.2)%
Passenger Revenue per
Available Seat Mile
(PRASM)(2) 10.19 cents 12.26 cents (16.9)%
Operating Cost Per
Available Seat Mile
(CASM)(2) 11.85 cents 19.85 cents (40.3)%
CASM excluding
Special Items(2) -
See Note A 11.69 cents 13.43 cents (13.0)%
CASM excluding
Special Items and
Fuel Expense and
Related Taxes(2,3)
- See Note A 8.16 cents 7.95 cents 2.6%
Passenger Load Factor (2) 82.1% 82.9% (0.8) pts
Fuel Gallons Consumed
(millions)(2) 2,951 3,182 (7.3)%
Average Price Per Fuel
Gallon, net of hedging
activity(2) $2.15 $3.34 (35.6)%
Number of Aircraft in
Fleet, End of Period 1,001 1,020 (19) aircraft
Full-Time Equivalent
Employees, End of
Period 81,740 85,507 (4.4)%
Mainline:
Revenue Passenger Miles
(millions) 126,169 136,551 (7.6)%
Available Seat Miles
(millions) 152,141 163,254 (6.8)%
Operating Cost Per
Available Seat Mile
(CASM) 10.92 cents 19.53 cents (44.1)%
CASM excluding
Special Items -
See Note A 10.74 cents 12.14 cents (11.5)%
CASM excluding
Special Items and
Fuel Expense and
Related Taxes -
See Note A 7.28 cents 7.08 cents 2.8%
Fuel Gallons Consumed
(millions) 2,378 2,604 (8.7)%
Average Price Per
Fuel Gallon,
net of hedging
activity $2.24 $3.32 (32.5)%
Number of Aircraft
in Fleet, End of
Period 750 770 (20) aircraft
(1) Data presented reflects operations for both Delta and Northwest for
the nine months ended Sept. 30, 2008.
(2) Data presented includes operations under our contract carrier
arrangements.
(3) Excludes $658 million and $1.4 billion, for the nine months ended
September 2009 and 2008, respectively, for fuel expense incurred under
contract carrier arrangements
10-22-2009 | 04:23 AM
#10
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Joined: Jun 2006
Posts: 18,563
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From: A-320A
Note A: The following tables show reconciliations of non-GAAP financial measures. The reasons Delta uses these measures are described below.
• Delta completed its merger with Northwest Airlines on October 29, 2008. Accordingly, Delta's financial results under GAAP include the results of Northwest Airlines for the period January 1, 2009 through September 30, 2009.
Under GAAP, Delta does not include in its financial results the results of Northwest Airlines prior to the completion of the merger. Accordingly, Delta's financial results under GAAP for the September 2008 quarter do not include the results of Northwest Airlines for that period. This impacts the comparability of Delta's financial statements under GAAP for the September 2009 and 2008 quarters.
Delta presents its financial results for the September 2009 and September 2008 quarters under GAAP as well as on a "combined basis." "Combined basis" means the company combines the financial results of Delta and Northwest as if the merger had occurred prior to the beginning of the applicable period. Delta believes presenting this financial information on a combined basis provides a more meaningful basis for comparing Delta's year-over-year financial performance than the GAAP financial information.
This press release also includes guidance for the December 2009 quarter. Please note the year-over-year guidance comparisons assume the 2008 financial statements for the applicable periods were prepared on a combined basis, excluding special items and out-of-period fuel hedge losses. Delta is unable to reconcile certain forward-looking projections to GAAP, including projected consolidated cost per available seat mile (CASM) and Mainline non-fuel CASM, as the nature or amount of special items cannot be estimated at this time.
• Delta excludes special items because management believes the exclusion of these items is helpful to investors to evaluate the company's recurring operational performance.
• Delta excludes non-cash mark-to-market (MTM) adjustments related to fuel hedges settling in future periods in order to present financial results related to operations in the period shown.
• Delta presents consolidated and Mainline CASM excluding fuel expense and related taxes because management believes the volatility in fuel prices impacts the comparability of year-over-year financial performance.
• Consolidated and Mainline CASM excludes ancillary businesses not associated with the generation of a seat mile. These transactions include expenses related to Delta's providing maintenance and staffing services to third parties, dedicated freighter operations and Delta's vacation wholesale operations.
• Delta presents net capital expenditures because management believes this metric is helpful to investors to evaluate the company's investing activities.
• Delta completed its merger with Northwest Airlines on October 29, 2008. Accordingly, Delta's financial results under GAAP include the results of Northwest Airlines for the period January 1, 2009 through September 30, 2009.
Under GAAP, Delta does not include in its financial results the results of Northwest Airlines prior to the completion of the merger. Accordingly, Delta's financial results under GAAP for the September 2008 quarter do not include the results of Northwest Airlines for that period. This impacts the comparability of Delta's financial statements under GAAP for the September 2009 and 2008 quarters.
Delta presents its financial results for the September 2009 and September 2008 quarters under GAAP as well as on a "combined basis." "Combined basis" means the company combines the financial results of Delta and Northwest as if the merger had occurred prior to the beginning of the applicable period. Delta believes presenting this financial information on a combined basis provides a more meaningful basis for comparing Delta's year-over-year financial performance than the GAAP financial information.
This press release also includes guidance for the December 2009 quarter. Please note the year-over-year guidance comparisons assume the 2008 financial statements for the applicable periods were prepared on a combined basis, excluding special items and out-of-period fuel hedge losses. Delta is unable to reconcile certain forward-looking projections to GAAP, including projected consolidated cost per available seat mile (CASM) and Mainline non-fuel CASM, as the nature or amount of special items cannot be estimated at this time.
• Delta excludes special items because management believes the exclusion of these items is helpful to investors to evaluate the company's recurring operational performance.
• Delta excludes non-cash mark-to-market (MTM) adjustments related to fuel hedges settling in future periods in order to present financial results related to operations in the period shown.
• Delta presents consolidated and Mainline CASM excluding fuel expense and related taxes because management believes the volatility in fuel prices impacts the comparability of year-over-year financial performance.
• Consolidated and Mainline CASM excludes ancillary businesses not associated with the generation of a seat mile. These transactions include expenses related to Delta's providing maintenance and staffing services to third parties, dedicated freighter operations and Delta's vacation wholesale operations.
• Delta presents net capital expenditures because management believes this metric is helpful to investors to evaluate the company's investing activities.
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