This adjustment relates to recording our share of the losses recorded by our equity method investees.
We also regularly adjust certain GAAP measures for the following items, if applicable, for the reasons indicated below: MTM adjustments and settlements on hedges. We've detected you are on Internet Explorer. Adjustments. Delta Air Lines Management believes this metric is helpful to investors in assessing the company's overall debt profile. We have adjusted for these items because management believes investors should be informed that a portion of these capital expenditures from airport construction projects are either funded with restricted cash specific to these projects or reimbursed by a third party. Total passenger revenue was 75 percent recovered from 2019 levels, the company said. Compared to the December quarter of 2019, non-fuel unit costs (CASM-Ex) were 8.3 percent higher, including a 1.2 point impact primarily due to omicron disruptions the last two weeks of the December quarter. What do you make of Delta's full-year results for 2021?
While the impact of Omicron will be felt, Delta isn't expecting it to be as bad as previous waves. At the end of the December quarter 2021, the company had total debt and finance lease obligations of $26.9 billion with adjusted net debt of $20.6 billion and a weighted average interest rate of 4.2 percent. Based in Frankfurt, Germany. Rivals' shares also dropped more than the broader market, which slumped after inflation data came in higher than expected. However, while Omicron doesn't share a name with the airline, it will slightly impact the recovery. An error has occurred, please try again later. Delta CEO on summer disruptions: We had a rough six weeks. "The chief issue we're working through is not hiring but a training and experience bubble," Bastian said on an earnings call Wednesday. Compared to the September quarter 2021, system yields improved 7 percent on a system load factor decline of 2 points to 78 percent. Copyright 2022 Dow Jones & Company, Inc. All Rights Reserved. Do Not Sell My Personal Information (CA Residents Only). Correction: Airfare dropped a seasonally adjusted 1.8% from May to June. Over the key July Fourth holiday weekend, Delta allowed travelers to change their flights without paying a difference in fare, an unusual waiver that the airline said allowed customers to avoid potential flight disruptions. Unrealized gains/losses result from our equity investments that are accounted for at fair value in non-operating expense. Bastian said the carrier still needs to hire more pilots, flight attendants and mechanics, and that reservations and airport staffing is "largely where we need to be.". Bastian said Delta is limiting its capacity and that it has already improved its performance. "We pushed too hard. We adjust for this activity because it provides a more meaningful comparison to our airline industry peers. Stay informed:Sign upfor ourdailyandweeklyaviation news digests. Its people are committed to these values while leading the way in ensuring safe, reliable and comfortable travel. Impairments and equity method losses. Government grant recognition. Data is a real-time snapshot *Data is delayed at least 15 minutes.
Such fair value changes are not necessarily indicative of the actual settlement value of the underlying hedge in the contract settlement period, and therefore we remove this impact to allow investors to better understand and analyze our core performance. Power & Associates as the No. Non-operating expense for the December quarter 2021 was $658 million including equity method losses, mark-to-market losses on certain investments and losses on the extinguishment of debt. To recognize the extraordinary efforts of our employees through the pandemic, we will make a special profit-sharing payment to eligible employees in February 2022, based on the adjusted pre-tax profit earned during the second half of 2021.This adjustment allows investors to better understand and analyze our recurring cost performance and provides a more meaningful comparison of our core operating costs to the airline industry. Commenting on the airline's Q4 results, 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.". Revenue for domestic travel was 3% higher, Delta said, noting it also logged improvements in trans-Atlantic travel. Aircraft fuel and related taxes. We adjust capital expenditures for the following items to determine gross capital expenditures for the reasons described below: Financed aircraft acquisitions. Total operating expense, adjusted of $8.1 billion in the December quarter 2021 increased 3 percent sequentially, driven by both higher fuel and non-fuel costs from the continued restoration of the airline. Delta is the first U.S. airline to report earnings for the second quarter. It expects third-quarter sales to rise 1% to 5% compared with three years ago, along with increased costs, a sign of confidence that it expects fares to remain elevated. "Omicron is expected to temporarily delay the demand recovery 60 days, but as we look past the peak, we are confident in a strong spring and summer travel season with significant pent-up demand for consumer and business travel. MTM adjustments on investments. ($ in millions except per share and unit costs), Total revenue per available seat mile (TRASM) (cents), Cost per available seat mile (CASM) (cents). Free cash flow is defined as net cash from operating activities and net cash from investing activities, adjusted for (i) net redemptions/purchases of short-term investments, (ii) strategic investments and related and (iii) net cash flows related to certain airport construction projects and other. 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, goals, aspirations, commitments and strategies reflected in or suggested by the forward-looking statements. Fuel expense percent change full year 2021 compared to full year 2019: Free Cash Flow. Delta reduces adjusted total debt by cash, cash equivalents and short-term investments, and LGA restricted cash, resulting in adjusted net debt, to present the amount of assets needed to satisfy the debt. Delta is a values-driven company with a mission of connecting the people and cultures of the globe, striving to foster understanding across a diverse world. The company's Air Traffic Liability was $6.4 billion at December quarter-end, approximately flat compared to the end of the September quarter. We adjust for this activity to provide investors a better understanding of the company's free cash flow generated by our operations. Equity investment MTM adjustments. Aircraft maintenance materials and outside repairs, Passenger commissions and other selling expenses, Impairments and equity method (losses)/gains, Basic Weighted Average Shares Outstanding, Diluted Weighted Average Shares Outstanding, Ticket - Business cabin and premium products, Passenger revenue per available seat mile (cents), Total revenue per available seat mile (cents), Average price per fuel gallon, adjusted - see Note A, Net cash provided by operating activities, Flight equipment, including advance payments, Ground property and equipment, including technology, Payments on debt and finance lease obligations, Net cash (used in)/provided by financing activities, Net (Decrease)/Increase in Cash, Cash Equivalents and Restricted Cash Equivalents, Cash, cash equivalents and restricted cash equivalents at beginning of period, Cash, cash equivalents and restricted cash equivalents at end of period. ATLANTA, Jan. 13, 2022 /PRNewswire/ --Delta Air Lines (NYSE:DAL) today reported financial results for the December quarter and full year 2021 and provided its outlook for the March quarter 2022. Net cash flows related to certain airport construction projects. This copy is for your personal, non-commercial use only. The news was welcome after the financial suffering that many airlines faced in 2020 due to the arrival of the COVID-19 pandemic. 38 on the comprehensive global list, Promoted health equity and responded to employee feedback with a new 2022 healthcare option designed to increase predictability and lower unplanned, out-of-pocket expenses for plan participants, Engaged senior leaders in Racial Equity Leadership Workshops, led by the Groundwater Institute, Built upon Delta's commitment to supplier diversity by launching vodka from Du Nord Social Spirits, America's first Black-owned distillery, on all domestic flights and Une Femme's 100 percent women-made wine on select flights, Concluded 2021 with a robust set of climate-related goals including committing to set a medium-term science-based target for our global airline as well as a net zero emissions target for 2050, both aligned with the SBTi framework and the UN Race to Zero, Signed 27 SAF agreements with corporate and agency customers in 2021. According to the airline, domestic holiday revenue reached 78% of what the airline had seen in 2019. Airport staffing shortages in Europe have contributed to travel chaos with many passengers facing long lines and lost bags. Despite expectations for a loss in the March quarter, we remain positioned to generate a healthy profit in the June, September and December quarters, resulting in a meaningful profit in 2022.". With 194.5 billion available seat miles, the airline's passenger load factor averaged out at 69% for the whole year. The gains/losses are driven by changes in stock prices, foreign currency fluctuations and other valuation techniques for investments in companies without publicly-traded shares. These symbols will be available throughout the site during your session. Net cash flows related to certain airport construction projects. Type a symbol or company name. Delta revealed that its total revenue had recovered to around 80% of 2019 figures during the last quarter of the year. Adjusted Net Debt. Such statements are not guarantees or promised outcomes and should not be construed as such. You'll now be able to see real-time price and activity for your symbols on the My Quotes of Nasdaq.com. For non-personal use or to order multiple copies, please contact Dow Jones Reprints at 1-800-843-0008 or visit www.djreprints.com. ", 3Fuel guidance based on prices as of January 11 (Brent at $81, cracks at $17, Monroe profit with RINS at $1.31), 4Includes an ~3 point impact of operational disruption related cost. However, it is not all rainbows yet, with the Omicron variant affecting schedules due to associated staff sickness. This adjusts capital expenditures to reflect aircraft deliveries that are leased as capital expenditures. "The commercial strengths we spoke about last month at Capital Markets Day are evident in our December quarter results. We adjust for profit sharing because this adjustment allows investors to better understand and analyze our recurring cost performance and provides a more meaningful comparison of our core operating costs to the airline industry. We recognized $4.5billion of the grant proceeds from the payroll support program extensions as contra-expense during the full year 2021. Will the Omicron variant be just a small hiccup? A Division of NBCUniversal. Reconciliations may not calculate due to rounding. During 2020, we recorded restructuring charges for items such as fleet impairments and voluntary early retirement and separation programs following strategic business decisions in response to the COVID-19 pandemic. In addition, carbon offsets expensed during the quarter drove a 3 impact on fuel prices as Delta supports its commitment to carbon neutrality by pursuing high quality, verified offsets. Delta and other airlines have been comparing their results to 2019 to show their progress in getting back to pre-pandemic performance. Sign up for free newsletters and get more CNBC delivered to your inbox, Get this delivered to your inbox, and more info about our products and services., 2022 CNBC LLC. Mark-to-market ("MTM") adjustments are defined as fair value changes recorded in periods other than the settlement period. Delta was named by J.D. 5-Year History: What Happened To City Star Airlines? Net redemptions/purchases of short-term investments represent the net purchase and sale activity of investments and marketable securities in the period, including gains and losses. Adjusted fuel price of $2.10 per gallon was up 8 percent compared to the September quarter 2021 driven by higher market prices and partially offset by continued refinery contribution and an improvement in RINs pricing and volume obligations. "We had a rough six weeks," Bastian said, apologizing to customers for the disruptions. These risks and uncertainties include, but are not limited to, the material adverse effect that the COVID-19 pandemic is having on our business; the impact of incurring significant debt in response to the pandemic; failure to comply with the financial and other covenants in our financing agreements; the possible effects of accidents involving our aircraft or aircraft of our airline partners; breaches or lapses in the security of technology systems on which we rely; disruptions in our information technology infrastructure; our dependence on technology in our operations; our commercial relationships with airlines in other parts of the world and the investments we have in certain of those airlines; the effects of a significant disruption in the operations or performance of third parties on which we rely; failure to realize the full value of intangible or long-lived assets; labor issues; the effects of weather, natural disasters and seasonality on our business; the cost of aircraft fuel; the availability of aircraft fuel; failure or inability of insurance to cover a significant liability at Monroe's Trainer refinery; failure to comply with existing and future environmental regulations to which Monroe's refinery operations are subject, including costs related to compliance with renewable fuel standard regulations; our ability to retain senior management and other key employees, and to maintain our company culture; significant damage to our reputation and brand, including from exposure to significant adverse publicity; the effects of terrorist attacks, geopolitical conflict or security events; competitive conditions in the airline industry; extended interruptions or disruptions in service at major airports at which we operate or significant problems associated with types of aircraft or engines we operate; the effects of extensive government regulation we are subject to; the impact of environmental regulation, including increased regulation to reduce emissions and other risks associated with climate change, on our business; and unfavorable economic or political conditions in the markets in which we operate or volatility in currency exchange rates. The recovery is being led by the airlines' premium cabins, With domestic premium revenues sitting at 84% of Q4 2019. Operating cash flow during the December quarter 2021 was $555 million. Delta is the first airline to commit to becoming carbon neutral on a global basis by focusing on carbon reductions and removals, stakeholder engagement, and coalition building. This sat slightly higher at 78% for the last quarter alone. The airline saw revenues recover to around 80% of pre-pandemic levels. A surge in travel demand helped the airline post $735 million in net income. For 2021, total operating expense, adjusted of $29.2 billion decreased 27 percent compared to full year 2019, driven by lower salaries and related benefits, fuel and volume and selling-related expense. About Delta Air Lines In a world that thrives on connection, no one better connects the world than Delta Air Lines (NYSE: DAL). The adjustment for aircraft fuel and related taxes allows investors to better understand and analyze our non-fuel costs and year-over-year financial performance. Net cash flows related to certain airport construction projects and other. Let us know what you think and why in the comments! "During 2021, we made significant progress restoring our balance sheet, reducing gross debt by $6 billion and fully funding our pension plans on a PPA basis," Janki said. 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, 2020 and our Quarterly Report for the quarterly period ended September 30, 2021. We have adjusted for these items because management believes investors should be informed that a portion of these capital expenditures from airport construction projects are either reimbursed by a third party or funded with restricted cash specific to these projects. When the symbol you want to add appears, add it to My Quotes by selecting it and pressing Enter/Return. Delta Air Lines ended the year with a liquidity of $14.2 billion. Got a confidential news tip? Copyright 2022 Dow Jones & Company, Inc. All Rights Reserved. "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. Outsmart the market with Smart Portfolio analytical tools powered by TipRanks. Delta posted a quarterly profit thanks to travelers willing to pay up to fly, more than making up for higher costs. from 8 AM - 9 PM ET. Powered by its people around the world, Delta is the U.S. global airline leader in safety, innovation, reliability and customer experience. Fuel expense, adjusted of $1.6 billion in the December quarter 2021 increased 4 percent, or $55million compared to the September quarter 2021. "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. Operating revenue, adjusted of $8.4 billion for the December quarter 2021 improved 2 percent, or $149 million from September quarter 2021. "With omicron impacting our near-term outlook, we expect losses in January and February months with a return to profitability in the month of March. Touch device users, explore by touch or with swipe gestures. The volatility in fuel prices impacts the comparability of year-over-year financial performance. The tables below show reconciliations of non-GAAP financial measures used in this release to the most directly comparable GAAP financial measures. Bastian said Delta added 18,000 employees since the start of 2021 to bring it to 95% of its 2019 staffing. December quarter 2021 GAAP pre-tax loss of $395 million, pre-tax margin of (4.2) percent and loss per share of $0.64 on total operating revenue of $9.5 billion, December quarter 2021 adjusted pre-tax income of $170 million, adjusted pre-tax margin of 2.0 percent and adjusted earnings per diluted share of $0.22 on adjusted operating revenue of $8.4 billion, Full year 2021 GAAP pre-tax income of $398 million, on total operating revenue of $29.9 billion, Full year 2021 adjusted pre-tax loss of $3.4 billion on adjusted operating revenue of $26.7 billion. Net (redemptions)/purchases of short-term investments, Net cash flows related to certain airport construction projects and other, Cision Distribution 888-776-0942 The airline noted strong holiday demand as a contributing factor to domestic revenue recovery. According to the airline's latest filing, its GAAP net income was $280 million, still a significant way below the $4.8 billion reported for 2019. Working closely with British Airways, Lufthansa and others, Tom provides commentary on topical issues for outlets including the BBC. Delta is capping its expansion, keeping third-quarter capacity to between 83% and 85% of 2019 levels, as it faces backlogs in training new staff. An Airbus A330-323 aircraft, operated by Delta Air Lines. When typing in this field, a list of search results will appear and be automatically updated as you type. This copy is for your personal, non-commercial use only. Delta urged and convinced a similar number of employees to take buyouts or early retirement packages earlier in the pandemic, an effort to cut costs. According to the carrier, it operated 134.7 billion revenue passenger seat miles during the past year. For the best Barrons.com experience, please update to a modern browser. Note A: The following tables show reconciliations of non-GAAP financial measures. Cash flows related to certain airport construction projects are included in capital expenditures. "The recent rise in COVID cases associated with the omicron variant is expected to impact the pace of demand recovery early in the quarter, with recovery momentum resuming from President's Day weekend forward. During the December quarter 2021, fuel efficiency, defined as gallons per 1,000 ASMs, improved 4.3 percent versus the same period in 2019 as a result of our fleet renewal efforts. "We did that on our own nickel just to reunite or to help the customers sort their bags as quickly as possible.". These adjustments are made for the following reasons: Net redemptions/purchases of short-term investments. Non-operating expense, adjusted was $175 million. EDGAR is a federally registered trademark of the U.S. Securities and Exchange Commission. Cash flows related to certain airport construction projects are included in our GAAP operating activities and capital expenditures. Caution should be taken not to place undue reliance on our forward-looking statements, which represent our views only as of the date of this press release, and which we undertake no obligation to update except to the extent required by law. Highlights of the December quarter and full year 2021 results, including both GAAP and adjusted metrics, are on page five and are incorporated here. Forward Looking Projections. December quarter and full year results have been adjusted primarily for the government grant recognition, impairments and equity method losses, losses on extinguishment of debt, unrealized losses on investments, special profit-sharing payment and third-party refinery sales as described in the reconciliations in Note A. This adjustment relates to early termination of a portion of our debt. Content Manager Degree educated in Aerospace Technology, this certified pilot is a passionate specialist in European aviation. The company expects a third-quarter profit and reiterated its forecast for full-year profitability. Pre-Tax (Loss)/Income, Net (Loss)/Income, and (Loss)/DilutedEarnings per Share, adjusted, MTM adjustments and settlements on hedges, Operating Revenue, adjusted and Total Revenue Per Available Seat Mile ("TRASM"), adjusted. As Team, Celebrated 200 Chairman's Club inductees through a historic 25, Named No. Third-party refinery sales. Create your Watchlist to save your favorite quotes on Nasdaq.com. Compared to the same period in 2019, operating revenue, adjusted was 74 percent restored, in line with the company's mid-December guidance update on system capacity that was 79 percent restored compared to December quarter 2019 levels. Special profit-sharing payment. stock took off on Wednesday, after the company reported a return to profitability in the month of March and outlined an upbeat outlook for revenue across the next three months. 1 in the annualBusiness Travel News Airline Survey for the 11th consecutive year, sweeping all categories for the 8th straight year, Opened the first-ever Delta-TSA PreCheck express lobby and bag drop at Hartsfield-Jackson Atlanta International Airport, with expanded facial recognition capabilities for touch-free, seamless entry, Installed high-speed Viasat-powered Wi-Fi on 300 aircraft in 2021, enabling customers on Delta's most popular routes to stream and browse their favorite sites at fast speeds for a simple, flat rate of, Launched in-flight entertainment partnership with leading interactive fitness platform Peloton to offer exclusive well-being focused content, giving customers more ways to stretch and unwind at their seats, Enhanced Delta FlyReady, a digital solution that takes the guesswork out of international travel in the pandemic era, enabling customers to understand and manage entry requirements at their destination, Extended Medallion Status for current Medallion members and rolled over all Medallion Qualification Miles for the second year in a row, Launched updates to Global Upgrade Certificates, allowing customers more access to premium seats in Delta Premium Select, Announced strengthening of executive leadership team with the hiring of, Recognized as the No. The carrier also vowed to improve reliability after an increase in delays and cancellations prompted it to scale back its summer schedule. Delta (ticker: DAL) shares soared 5% in U.S. premarket trading after the group notched a loss of $1.23 a share, on an adjusted basis, on total revenue of $9.3 billion in the first three months of 2021. Copy and paste multiple symbols separated by spaces. This was driven primarily by people-related and seasonal costs. 2021, EDGAROnline, a division of Donnelley Financial Solutions. Type a symbol or company name. 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, Environmental, Social and Governance (ESG), HVAC (Heating, Ventilation and Air-Conditioning), Machine Tools, Metalworking and Metallurgy, Aboriginal, First Nations & Native American. Other Highlights from the December Quarter 2021, December Quarter and Full Year 2021 Results. 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: Restricted cash included in prepaid expenses and other, Total cash, cash equivalents and restricted cash equivalents, Expendable parts and supplies inventories, net, Current maturities of debt and finance leases, Pension, postretirement and related benefits, Total liabilities and stockholders' equity. Free cash flow was negative $441 million for the quarter with gross capital expenditures reinvested in the business of $948 million. The airline revealed it expects revenues for the coming quarter to sit between 72% and 76% of those seen in 2019. Last October, Bastian touted a "juniority benefit" to hiring new employees. Strategic investments and related. The reasons Delta uses these measures are described below. All in all, 2021 was a good year for American carriers. Delta recently "had a separate charter just to repatriate bags back to customers that have been stranded because of some of the operational issues the European airports were having," said Bastian. Its fuel expense rose 41% from three years ago to $3.2 billion. Non-fuel cost, adjusted of $6.5 billion was up 3 percent sequentially on a 4 percent decrease in capacity. Transportation Secretary Pete Buttigieg publicly admonished airlines for not being prepared for summer travel. Delta sometimes uses information ("non-GAAP financial measures") that is derived from the Consolidated Financial Statements, but that is not presented in accordance with accounting principles generally accepted in the U.S. ("GAAP").