Thursday, 13 January 2022

Delta reports adjusted pre-tax loss of $3.4 billion in 2021

Delta Air Lines today reported financial results for the December quarter and full year 2021 and provided its outlook for the March quarter 2022.  Highlights of the December quarter and full year 2021 results, including both GAAP and adjusted metrics, are on page five and are incorporated here.

"2021 was a year like no other for Delta, with significant progress in our recovery supported by growing brand preference, enabling us to be the only major U.S. airline to deliver profitability across the second half of the year," said Ed Bastian, Delta's chief executive officer.  "As always, our people drove this success, which is why we were happy to announce this morning a special profit-sharing payment for all eligible employees."

"While the rapidly spreading omicron variant has significantly impacted staffing levels and disrupted travel across the industry, Delta's operation has stabilized over the last week and returned to pre-holiday performance," Bastian said.  "Omicron is expected to temporarily delay the demand recovery 60 days, but as we look past the peak, we are confident in a strong spring and summer travel season with significant pent-up demand for consumer and business travel."

December Quarter 2021 Financial Results 


Adjusted pre-tax income of $170 million excludes a net impact of $564 million primarily in equity method losses, mark-to-market adjustments on investments and special profit-sharing payment
Adjusted operating revenue of $8.4 billion, which excludes third-party refinery sales, was 74 percent recovered versus December quarter 2019 on capacity that was 79 percent restored
Total operating expense decreased $833 million compared to the December quarter 2019. Adjusted for costs from third-party refinery sales, total operating expense decreased $1.9 billion or 19% percent in the December quarter 2021 versus the comparable 2019 period
Remuneration from American Express in the quarter was $1.2 billion, up 11 percent compared to the December quarter 2019
At the end of the December quarter, the company had $14.2 billion in liquidity, including cash and cash equivalents, short-term investments and undrawn revolving credit facilities

Full Year 2021 Financial Results 


Adjusted pre-tax loss of $3.4 billion excludes a net benefit of $3.8 billion from items primarily related to the Payroll Support Programs (PSP), partially offset by equity method losses, debt extinguishment charges and special profit-sharing payment
Generated a pre-tax profit of $1.1 billion in the second half of 2021. Excluding PSP, mark-to-market adjustments, equity method losses and debt extinguishment charges reported an adjusted pre-tax profit of $386 million in the second half of 2021
Adjusted operating revenue of $26.7 billion, which excludes third-party refinery sales, was 57 percent recovered versus full year 2019 on capacity that was 71 percent restored
Total operating expense, which includes $4.5 billion of benefit related to PSP, decreased $12.4 billion compared to 2019. Adjusted for the benefits related to PSP and costs from third-party refinery sales, total operating expense, adjusted decreased $10.9 billion or 27 percent versus 2019
Remuneration from American Express for full year 2021 was $4.0 billion, 98 percent restored compared to full year 2019
Invested $2.9 billion back in the business and reduced financial obligations by $7 billion, including fully funding the pension plans on a Pension Protection Act (PPA) basis
The company had total debt and finance lease obligations of $26.9 billion with adjusted net debt of $20.6 billion at the end of December 2021

DELTA AIR LINES, INC.

Consolidated Statements of Operations

(Unaudited)












Three Months Ended




Year Ended




December 31,




December 31,



(in millions, except per share data)

2021

2019

$ Change

% Change


2021

2019

$ Change

% Change

Operating Revenue:










Passenger

$       7,241

$     10,245

$      (3,004)

(29)%


$     22,519

$     42,277

$    (19,758)

(47)%

Cargo

304

187

117

63%


1,032

753

279

37%

Other

1,925

1,007

918

91%


6,348

3,977

2,371

60%

  Total operating revenue

9,470

11,439

(1,969)

(17)%


29,899

47,007

(17,108)

(36)%











Operating Expense:










Salaries and related costs

2,632

3,046

(414)

(14)%


9,728

11,601

(1,873)

(16)%

Aircraft fuel and related taxes

1,577

2,012

(435)

(22)%


5,633

8,519

(2,886)

(34)%

Ancillary businesses and refinery

1,233

299

934

NM


3,957

1,245

2,712

NM

Contracted services

697

742

(45)

(6)%


2,420

2,942

(522)

(18)%

Landing fees and other rents

542

538

4

1%


2,019

2,176

(157)

(7)%

Depreciation and amortization

504

622

(118)

(19)%


1,998

2,581

(583)

(23)%

Regional carrier expense

478

536

(58)

(11)%


1,736

2,158

(422)

(20)%

Aircraft maintenance materials and outside repairs

386

417

(31)

(7)%


1,401

1,751

(350)

(20)%

Passenger commissions and other selling expenses

313

542

(229)

(42)%


953

2,211

(1,258)

(57)%

Passenger service

236

325

(89)

(27)%


756

1,312

(556)

(42)%

Aircraft rent

118

105

13

12%


430

423

7

2%

Restructuring charges

(16)

(16)

NM


(19)

(19)

NM

Profit sharing

108

387

(279)

(72)%


108

1,643

(1,535)

(93)%

Government grant recognition

NM


(4,512)

(4,512)

NM

Other

399

469

(70)

(15)%


1,405

1,827

(422)

(23)%

  Total operating expense

9,207

10,040

(833)

(8)%


28,013

40,389

(12,376)

(31)%











Operating Income

263

1,399

(1,136)

(81)%


1,886

6,618

(4,732)

(72)%











Non-Operating Expense:










Interest expense, net

(265)

(72)

(193)

NM


(1,279)

(301)

(978)

NM

Impairments and equity method (losses)/gains

(232)

18

(250)

NM


(337)

(62)

(275)

NM

Gain/(Loss) on investments, net

(197)

136

(333)

NM


56

119

(63)

(53)%

Loss on extinguishment of debt

(54)

(54)

NM


(319)

(319)

NM

Miscellaneous, net

90

(84)

174

NM


391

(176)

567

NM

  Total non-operating expense, net

(658)

(2)

(656)

NM


(1,488)

(420)

(1,068)

NM











(Loss)/Income Before Income Taxes

(395)

1,397

(1,792)

NM


398

6,198

(5,800)

(94)%











Income Tax Provision

(13)

(298)

285

(96)%


(118)

(1,431)

1,313

(92)%











Net (Loss)/Income

(408)

1,099

(1,507)

NM


$          280

$       4,767

$      (4,487)

(94)%











Basic (Loss)/Earnings Per Share

$        (0.64)

$         1.71




$         0.44

$         7.32



Diluted (Loss)/Earnings Per Share

$        (0.64)

$         1.71




$         0.44

$         7.30













Basic Weighted Average Shares Outstanding

637

642




636

651



Diluted Weighted Average Shares Outstanding

637

644




641

653



















DELTA AIR LINES, INC.

Passenger Revenue

(Unaudited)












Three Months Ended




Year Ended




December 31,




December 31,



(in millions)

2021

2019

$ Change

% Change


2021

2019

$ Change

% Change

Ticket - Main cabin

$       3,687

$       5,238

$      (1,551)

(30)%


$     11,626

$     21,919

$    (10,293)

(47)%

Ticket - Business cabin and premium products

2,585

3,684

(1,099)

(30)%


7,713

14,989

(7,276)

(49)%

Loyalty travel awards

573

726

(153)

(21)%


1,786

2,900

(1,114)

(38)%

Travel-related services

396

597

(201)

(34)%


1,394

2,469

(1,075)

(44)%

Total passenger revenue

$       7,241

$     10,245

$      (3,004)

(29)%


$     22,519

$     42,277

$    (19,758)

(47)%































DELTA AIR LINES, INC.

Other Revenue

(Unaudited)












Three Months Ended




Year Ended




December 31,




December 31,



(in millions)

2021

2019

$ Change

% Change


2021

2019

$ Change

% Change

Refinery

$       1,040

$             2

$       1,038

NM


$       3,229

$           97

$       3,132

NM

Loyalty program

510

519

(9)

(2)%


1,770

1,962

(192)

(10)%

Ancillary businesses

207

305

(98)

(32)%


793

1,200

(407)

(34)%

Miscellaneous

168

181

(13)

(7)%


556

718

(162)

(23)%

Total other revenue

$       1,925

$       1,007

$         918

91%


$       6,348

$       3,977

$       2,371

60%











DELTA AIR LINES, INC.

Total Revenue

(Unaudited)













Increase (Decrease)





4Q21 versus 4Q19

Revenue


4Q21 ($M)


Change

Unit Revenue

Yield

Capacity

       Domestic

$

5,951


(22)%

(13)%

(9)%

(10)%

Atlantic


617


(53)%

(20)%

—%

(42)%

Latin America


560


(20)%

(13)%

(3)%

(8)%

Pacific


113


(81)%

(37)%

61%

(69)%

Total Passenger

$

7,241


(29)%

(11)%

(2)%

(21)%

Cargo Revenue


304


63%




Other Revenue


1,925


91%




Total Revenue

$

9,470


(17)%

5%



       Third Party Refinery Sales


(1,040)






Total Revenue, adjusted

$

8,430


(26)%

(6)%











DELTA AIR LINES, INC.

Statistical Summary

(Unaudited)



Three Months Ended




Year Ended




December 31,




December 31,




2021

2019

Change


2021

2019

Change

Revenue passenger miles (millions)

40,402

56,028

(28)

%


134,692

237,680

(43)

%

Available seat miles (millions)

51,744

65,468

(21)

%


194,474

275,379

(29)

%

Passenger mile yield (cents)

17.92

18.29

(2)

%


16.72

17.79

(6)

%

Passenger revenue per available seat mile (cents)

13.99

15.65

(11)

%


11.58

15.35

(25)

%

Total revenue per available seat mile (cents)

18.30

17.47

5

%


15.37

17.07

(10)

%

TRASM, adjusted - see Note A (cents)

16.29

17.39

(6)

%


13.71

16.97

(19)

%

Cost per available seat mile (cents)

17.79

15.34

16

%


14.40

14.67

(2)

%

CASM-Ex  - see Note A (cents)

12.56

11.59

8

%


12.12

10.88

11

%

Passenger load factor

78%

86%

(8)

pts


69%

86%

(17)

pts

Fuel gallons consumed (millions)

755

999

(24)

%


2,778

4,214

(34)

%

Average price per fuel gallon

$         2.09

$         2.01

4

%


$         2.02

$         2.02

%

Average price per fuel gallon, adjusted - see Note A

$         2.10

$         1.99

6

%


$         2.02

$         2.01

%

DELTA AIR LINES, INC.


Consolidated Statements of Cash Flows


(Unaudited)



Three Months Ended



December 31,


(in millions)

2021

2019


Cash Flows From Operating Activities:




Net (loss)/income

$                   (408)

$                  1,099


Depreciation and amortization

504

622


Changes in air traffic liability

(18)

(647)


Changes in balance sheet and other, net

477

(105)


     Net cash provided by operating activities

555

969






Cash Flows From Investing Activities:




Property and equipment additions:




Flight equipment, including advance payments

(635)

(570)


Ground property and equipment, including technology

(583)

(502)


Purchase of short-term investments

(1,856)


Redemption of short-term investments

2,878


Other, net

(283)

293


     Net cash used in investing activities

(479)

(779)






Cash Flows From Financing Activities:




Payments on debt and finance lease obligations

(1,148)

(516)


Repurchase of common stock

(225)


Proceeds from long-term obligations

1,557


Cash dividends

(259)


Fuel card obligation

297


Other, net

(19)

(12)


     Net cash (used in)/provided by financing activities

(1,167)

842






Net (Decrease)/Increase in Cash, Cash Equivalents and Restricted Cash Equivalents

(1,091)

1,032


Cash, cash equivalents and restricted cash equivalents at beginning of period

$                  9,660

$                  2,698


Cash, cash equivalents and restricted cash equivalents at end of period

$                  8,569

$                  3,730






The following table provides a reconciliation of cash, cash equivalents and restricted cash reported within the Consolidated Balance Sheets to the total of the same
such amounts shown above:







Current assets:




     Cash and cash equivalents

$                  7,933

$                  2,882


     Restricted cash included in prepaid expenses and other

163

212


Other assets:




     Cash restricted for airport construction

473

636


Total cash, cash equivalents and restricted cash equivalents

$                  8,569

$                  3,730







DELTA AIR LINES, INC.

Consolidated Balance Sheets

(Unaudited)








December 31,


December 31,

(in millions)

2021


2020

ASSETS

Current Assets:





Cash and cash equivalents

$                        7,933


$                        8,307


Short-term investments

3,386


5,789


Accounts receivable, net

2,404


1,396


Fuel inventory

694


377


Expendable parts and supplies inventories, net

404


355


Prepaid expenses and other

1,119


1,180


     Total current assets

15,940


17,404






Property and Equipment, Net:





Property and equipment, net

28,749


26,529






Other Assets:





Operating lease right-of-use assets

7,173


5,733


Goodwill

9,753


9,753


Identifiable intangibles, net

6,001


6,011


Cash restricted for airport construction

473


1,556


Equity investments

1,712


1,665


Deferred income taxes, net

1,370


1,988


Other noncurrent assets

1,300


1,357


     Total other assets

27,782


28,063

Total assets

$                      72,471


$                      71,996






LIABILITIES AND STOCKHOLDERS' EQUITY

Current Liabilities:





Current maturities of debt and finance leases

$                        1,782


$                        1,732


Current maturities of operating leases

693


678


Air traffic liability

6,228


4,044


Accounts payable

4,240


2,840


Accrued salaries and related benefits

2,457


2,086


Loyalty program deferred revenue

2,710


1,777


Fuel card obligation

1,100


1,100


Other accrued liabilities

1,746


1,670


     Total current liabilities

20,956


15,927






Noncurrent Liabilities:





Debt and finance leases

25,138


27,425


Noncurrent air traffic liability

130


500


Pension, postretirement and related benefits

6,364


10,630


Loyalty program deferred revenue

4,849


5,405


Noncurrent operating leases

7,002


5,713


Other noncurrent liabilities

4,398


4,862


     Total noncurrent liabilities

47,881


54,535






Commitments and Contingencies









Stockholders' Equity:

3,634


1,534

Total liabilities and stockholders' equity

$                      72,471


$                      71,996




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