View All News July 13, 2023 Delivered highest quarterly revenue and profitability in Delta's history Strong June quarter operating cash flow enabled accelerated debt reduction Expect record September quarter revenue, mid-teens operating margin and EPS of $2.20 - $2.50 Raising full year EPS outlook to $6 - $7 and reiterating free cash flow guide of $3 billion ATLANTA, July 13, 2023 /PRNewswire/ -- Delta Air Lines (NYSE: DAL) today reported financial results for the June quarter and provided its outlook for the September quarter 2023. Highlights of the June quarter, including both GAAP and adjusted metrics, are on page five and incorporated here. "Thanks to the incredible work of our entire team, Delta is delivering for our customers by providing strong operational performance and best in class service during this busy summer period. With this performance, we generated record revenue and profitability in the June quarter. Our people are the best professionals in the industry, and I'm proud to recognize their achievements with $667 million in the first half toward next year's profit sharing payment," said Ed Bastian, Delta's chief executive officer. "Consumer demand for air travel remains robust. Against this constructive backdrop, we are increasing our 2023 earnings guidance to $6 to $7 per share and reiterating our recently updated outlook for $3 billion of free cash flow." June Quarter 2023 GAAP Financial Results June Quarter 2023 Adjusted Financial Results September Quarter and Full Year Outlook1 3Q23 Forecast FY 2023 Forecast Total Revenue YoY +11% - 14% +17% - 20% Operating Margin Mid-Teens >12% Earnings Per Share $2.20 - $2.50 $6 - $7 1Non-GAAP measures; Refer to Non-GAAP reconciliations for comparison figures Additional metrics for financial modeling can be found in the Supplemental Information section under Quarterly Results on ir.delta.com. Revenue Environment and Outlook "We delivered record revenue in the June quarter, with total revenues19 percenthigher than the June quarter of 2022. These results reflect the strength of the demand environment, the hard work of our people and the momentum of Delta's brand," said Glen Hauenstein, Delta's president. "Robust demand is continuing into the September quarter where we expect total revenue to be similar to the June quarter, up 11 percent to 14 percent compared to the September quarter 2022 on capacity that is 16 percent higher." Cost Performance and Outlook "Non-fuel unit costs have reached an important inflection point with our rebuild substantially behind us, core maintenance normalizing and the benefits of scale and efficiency increasing into the second half," said Dan Janki, Delta's chief financial officer. "We expect September quarter non-fuel unit costs to decline 1 percent to 3 percent year over year, consistent with our outlook for low-single digit declines in the second half of the year." June Quarter 2023 Cost Performance Balance Sheet, Cash and Liquidity "Delta delivered $2.9 billion of free cash flow in the first half of the year, while consistently reinvesting in the business," Janki said. "With an outlook for $3 billion of free cash flow in 2023, we are accelerating debt repayment with a goal of retiring over $4 billion in debt this year. We are on track to reduce leverage to 3x by the end of this year and achieve investment grade metrics in 2024. During the quarter, we also reinstated the quarterly dividend, an important milestone that opens the shareholder base to yield-focused investors." June Quarter Highlights Operations, Network and Fleet Culture and People Customer Experience and Loyalty Environmental, Social and Governance June Quarter Results June quarter results have been adjusted primarily for thethird-party refinery sales, unrealized gains on investments and loss on extinguishment of debt as described in the reconciliations in Note A. GAAP $ % ($ in millions except per share and unit costs) 2Q23 2Q22 Operating income 2,491 1,519 972 64% Operating margin 16.0% 11.0% 5.0 pts 45% Pre-tax income 2,317 1,033 1,284 NM Pre-tax margin 14.9% 7.5% 7.4 pts 99% Net income 1,827 735 1,092 NM Diluted earnings per share 2.84 1.15 1.69 NM Operating revenue 15,578 13,824 1,754 13% Total revenue per available seat mile (TRASM) (cents) 22.58 23.47 (0.89) (4)% Operating expense 13,087 12,305 782 6% Cost per available seat mile (CASM) (cents) 18.97 20.89 (1.92) (9)% Fuel expense 2,516 3,223 (707) (22)% Average fuel price per gallon 2.52 3.74 (1.22) (33)% Operating cash flow 2,609 2,535 74 3% Capital expenditures 1,452 958 494 52% Total debt and finance lease obligations 20,205 24,839 (4,634) (19)% Adjusted $ % ($ in millions except per share and unit costs) 2Q23 2Q22 Operating income 2,494 1,445 1,049 73% Operating margin 17.1% 11.7% 5.4 pts 46% Pre-tax income 2,220 1,222 998 82% Pre-tax margin 15.2% 9.9% 5.3 pts 54% Net income 1,723 921 802 87% Diluted earnings per share 2.68 1.44 1.24 86% Operating revenue 14,613 12,311 2,302 19% TRASM (cents) 21.18 20.90 0.28 1% Operating expense 12,119 10,866 1,253 12% Non-fuel cost 9,011 7,516 1,495 20% Non-fuel unit cost (CASM-Ex) (cents) 13.06 12.76 0.30 2.4% Fuel expense 2,513 3,296 (783) (24)% Average fuel price per gallon 2.52 3.82 (1.30) (34)% Operating cash flow 2,648 2,465 183 7% Free cash flow 1,094 1,608 (514) (32)% Gross capital expenditures 1,572 864 708 82% Adjusted net debt 19,841 19,578 263 1% About Delta Air Lines Through the warmth and service of the Delta Air Lines (NYSE: DAL) people and the power of innovation, Delta never stops looking for ways to make every trip feel tailored to every customer. More than 90,000 Delta people lead the way in delivering a world-class customer experience on over 4,000 daily flights to more than 280 destinations on six continents, connecting people to places and to each other. Delta expects to serve nearly 200 million customers this year safely, reliably and with industry-leading customer service innovation – recognized as North America's most on-time airline. We're dedicated to ensuring that the future of travel is connected, personalized and enjoyable. Our people's genuine and enduring motivation is to make every customer feel welcomed and respected across every point of their journey with us. Headquartered in Atlanta, Delta operates significant hubs and key markets in Amsterdam, Atlanta, Boston, Detroit, London-Heathrow, Los Angeles, Mexico City, Minneapolis-St. Paul, New York-JFK and LaGuardia, Paris-Charles de Gaulle, Salt Lake City, Seattle, Seoul-Incheon and Tokyo. As the leading global airline, Delta's mission to connect the world creates opportunities, fosters understanding and expands horizons by connecting people and communities to each other and to their own potential. Powered by innovative and strategic partnerships with Aeromexico, Air France-KLM, China Eastern, Korean Air, LATAM, Virgin Atlantic and WestJet, Delta brings more choice and competition to customers worldwide. Delta is America's most-awarded airline thanks to the dedication, passion and professionalism of its people. It has been recognized by Cirium for operational excellence, as the top U.S. airline by the Wall Street Journal, among Fast Company's most innovative companies, the World's Most Admired Airline according to Fortune, as one of Glassdoor's Best Places to Work, and a top employer for diversity, veterans and best workplaces for women by Forbes. Forward Looking Statements 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, 2022. 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. DELTA AIR LINES, INC. Consolidated Statements of Operations (Unaudited) Three Months Ended Six Months Ended June 30, June 30, (in millions, except per share data) 2023 2022 $ Change % Change 2023 2022 $ Change % Change Operating Revenue: Passenger $ 13,205 $ 10,958 $ 2,247 21% $ 23,616 $ 17,865 $ 5,751 32% Cargo 172 272 (100) (37)% 381 561 (180) (32)% Other 2,201 2,594 (393) (15)% 4,340 4,747 (407) (9)% Total operating revenue 15,578 13,824 1,754 13% 28,337 23,173 5,164 22% Operating Expense: Salaries and related costs 3,692 2,955 737 25% 7,078 5,782 1,296 22% Aircraft fuel and related taxes 2,516 3,223 (707) (22)% 5,192 5,315 (123) (2)% Ancillary businesses and refinery 1,173 1,718 (545) (32)% 2,298 3,100 (802) (26)% Contracted services 994 791 203 26% 2,004 1,544 460 30% Landing fees and other rents 617 546 71 13% 1,201 1,050 151 14% Aircraft maintenance materials and outside repairs 614 522 92 18% 1,199 988 211 21% Passenger commissions and other selling expenses 651 526 125 24% 1,152 838 314 37% Depreciation and amortization 573 510 63 12% 1,137 1,016 121 12% Regional carrier expense 559 528 31 6% 1,117 1,018 99 10% Pilot agreement and related expenses — — — NM 864 — 864 NM Passenger service 442 369 73 20% 859 644 215 33% Profit sharing 595 54 541 NM 667 54 613 NM Aircraft rent 132 127 5 4% 264 249 15 6% Other 529 436 93 21% 1,090 840 250 30% Total operating expense 13,087 12,305 782 6% 26,122 22,438 3,684 16% Operating Income 2,491 1,519 972 64% 2,215 735 1,480 NM Non-Operating Expense: Interest expense, net (203) (269) 66 (25)% (430) (543) 113 (21)% Gain/(loss) on investments, net 128 (221) 349 NM 251 (368) 619 NM Loss on extinguishment of debt (29) (41) 12 (29)% (50) (66) 16 (24)% Pension and related (expense)/benefit (61) 73 (134) NM (122) 145 (267) NM Miscellaneous, net (9) (28) 19 (68)% (52) (70) 18 (26)% Total non-operating expense, net (174) (486) 312 (64)% (403) (902) 499 (55)% Income/(Loss) Before Income Taxes 2,317 1,033 1,284 NM 1,812 (167) 1,979 NM Income Tax Provision (490) (298) (192) 64% (348) (38) (310) NM Net Income/(Loss) $ 1,827 $ 735 $ 1,092 NM $ 1,464 $ (205) $ 1,669 NM Basic Income/(Loss) Per Share $ 2.86 $ 1.15 $ 2.29 $ (0.32) Diluted Income/(Loss) Per Share $ 2.84 $ 1.15 $ 2.28 $ (0.32) Basic Weighted Average Shares Outstanding 639 638 639 638 Diluted Weighted Average Shares Outstanding 642 641 642 638 DELTA AIR LINES, INC. Passenger Revenue (Unaudited) Three Months Ended Six Months Ended June 30, June 30, (in millions) 2023 2022 $ Change % Change 2023 2022 $ Change % Change Ticket - Main cabin $ 6,694 $ 5,664 $ 1,030 18% $ 11,917 $ 9,111 $ 2,806 31% Ticket - Premium products 5,135 4,109 1,026 25% 9,151 6,648 2,503 38% Loyalty travel awards 902 744 158 21% 1,645 1,287 358 28% Travel-related services 474 441 33 7% 903 819 84 10% Passenger revenue $ 13,205 $ 10,958 $ 2,247 21% $ 23,616 $ 17,865 $ 5,751 32% DELTA AIR LINES, INC. Other Revenue (Unaudited) Three Months Ended Six Months Ended June 30, June 30, (in millions) 2023 2022 $ Change % Change 2023 2022 $ Change % Change Refinery $ 965 $ 1,514 $ (549) (36)% $ 1,882 $ 2,700 $ (818) (30)% Loyalty program 774 650 124 19% 1,500 1,221 279 23% Ancillary businesses 214 206 8 4% 445 416 29 7% Miscellaneous 248 224 24 11% 513 410 103 25% Other revenue $ 2,201 $ 2,594 $ (393) (15)% $ 4,340 $ 4,747 $ (407) (9)% DELTA AIR LINES, INC. Total Revenue (Unaudited) Increase (Decrease) 2Q23 vs 2Q22 Revenue 2Q23 ($M) Change Unit Revenue Yield Capacity Domestic $ 8,944 8% (1)% 0% 9% Atlantic 2,803 65% 22% 17% 35% Latin America 926 24% 16% 11% 7% Pacific 532 175% 29% 0% 113% Passenger Revenue $ 13,205 21% 3% 2% 17% Cargo Revenue 172 (37)% Other Revenue 2,201 (15)% Total Revenue $ 15,578 13% (4)% Third Party Refinery Sales (965) Total Revenue, adjusted $ 14,613 19% 1% DELTA AIR LINES, INC. Statistical Summary (Unaudited) Three Months Ended Six Months Ended June 30, June 30, 2023 2022 Change 2023 2022 Change Revenue passenger miles (millions) 60,804 51,519 18 % 110,491 90,218 22 % Available seat miles (millions) 68,993 58,903 17 % 130,345 110,713 18 % Passenger mile yield (cents) 21.72 21.27 2 % 21.37 19.80 8 % Passenger revenue per available seat mile (cents) 19.14 18.60 3 % 18.12 16.14 12 % Total revenue per available seat mile (cents) 22.58 23.47 (4) % 21.74 20.93 4 % TRASM, adjusted - see Note A (cents) 21.18 20.90 1 % 20.30 18.49 10 % Cost per available seat mile (cents) 18.97 20.89 (9) % 20.04 20.27 (1) % CASM-Ex - see Note A (cents) 13.06 12.76 2 % 13.44 12.98 4 % Passenger load factor 88% 87% 1 pt 85% 81% 4 pts Fuel gallons consumed (millions) 997 863 16 % 1,885 1,613 17 % Average price per fuel gallon $ 2.52 $ 3.74 (33) % $ 2.75 $ 3.29 (16) % Average price per fuel gallon, adjusted - see Note A $ 2.52 $ 3.82 (34) % $ 2.77 $ 3.34 (17) % DELTA AIR LINES, INC. Consolidated Statements of Cash Flows (Unaudited) Three Months Ended June 30, (in millions) 2023 2022 Cash Flows From Operating Activities: Net Income $ 1,827 $ 735 Depreciation and amortization 573 510 Changes in air traffic liability (766) 805 Changes in profit sharing 595 54 Changes in balance sheet and other, net 380 431 Net cash provided by operating activities 2,609 2,535 Cash Flows From Investing Activities: Property and equipment additions: Flight equipment, including advance payments (1,074) (603) Ground property and equipment, including technology (378) (355) Purchase of short-term investments (1,013) (248) Redemption of short-term investments 1,064 943 Other, net 19 112 Net cash used in investing activities (1,382) (152) Cash Flows From Financing Activities: Payments on debt and finance lease obligations (1,820) (952) Other, net (12) (14) Net cash used in financing activities (1,832) (966) Net (Decrease)/Increase in Cash, Cash Equivalents and Restricted Cash Equivalents (605) 1,417 Cash, cash equivalents and restricted cash equivalents at beginning of period 3,429 8,135 Cash, cash equivalents and restricted cash equivalents at end of period $ 2,824 $ 9,552 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 Current assets: Cash and cash equivalents $ 2,668 $ 9,221 Restricted cash included in prepaid expenses and other 156 154 Other assets: Restricted cash included in other noncurrent assets — 177 Total cash, cash equivalents and restricted cash equivalents $ 2,824 $ 9,552 DELTA AIR LINES, INC. Consolidated Balance Sheets (Unaudited) June 30, December 31, (in millions) 2023 2022 ASSETS Current Assets: Cash and cash equivalents $ 2,668 $ 3,266 Short-term investments 3,368 3,268 Accounts receivable, net 3,122 3,176 Fuel inventory, expendable parts and supplies inventories, net 1,438 1,424 Prepaid expenses and other 2,484 1,877 Total current assets 13,080 13,011 Property and Equipment, Net: Property and equipment, net 34,092 33,109 Other Assets: Operating lease right-of-use assets 6,834 7,036 Goodwill 9,753 9,753 Identifiable intangibles, net 5,988 5,992 Equity investments 2,389 2,128 Other noncurrent assets 1,361 1,259 Total other assets 26,325 26,168 Total assets $ 73,497 $ 72,288 LIABILITIES AND STOCKHOLDERS' EQUITY Current Liabilities: Current maturities of debt and finance leases $ 2,065 $ 2,359 Current maturities of operating leases 699 714 Air traffic liability 10,422 8,160 Accounts payable 5,114 5,106 Accrued salaries and related benefits 3,340 3,288 Loyalty program deferred revenue 3,824 3,434 Fuel card obligation 1,100 1,100 Other accrued liabilities 1,918 1,779 Total current liabilities 28,482 25,940 Noncurrent Liabilities: Debt and finance leases 18,140 20,671 Pension, postretirement and related benefits 3,669 3,707 Loyalty program deferred revenue 4,443 4,448 Noncurrent operating leases 6,646 6,866 Other noncurrent liabilities 4,017 4,074 Total noncurrent liabilities 36,915 39,766 Commitments and Contingencies Stockholders' Equity: 8,100 6,582 Total liabilities and stockholders' equity $ 73,497 $ 72,288 Note A: The following tables showreconciliations of non-GAAP financial measures. The reasons Delta uses these measures are described below. Reconciliations may not calculate due to rounding. 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"). Under the Securities and Exchange Commission rules, non-GAAP financial measures may be considered in addition to results prepared in accordance with GAAP, but should not be considered a substitute for or superior to GAAP results. The tables below show reconciliations of non-GAAP financial measures used in this release to the most directly comparable GAAP financial measures. Forward Looking Projections. Delta is not able to reconcile forward looking non-GAAP financial measures without unreasonable effort because the adjusting items such as those used in the reconciliations below will not be known until the end of the period and could be significant. Adjustments .These reconciliations include certain adjustments to GAAP measures that are made to provide comparability between the reported periods, if applicable, and for the reasons indicated below: Third-party refinery sales. Refinery sales to third parties, and related expenses, are not related to our airline segment. Excluding these sales therefore provides a more meaningful comparison of our airline operations to the rest of the airline industry. MTM adjustments and settlements on hedges. Mark-to-market ("MTM") adjustments are defined as fair value changes recorded in periods other than the settlement period. 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. Settlements represent cash received or paid on hedge contracts settled during the applicable period. Restructuring charges. 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. During 2022, we recognized adjustments to certain of those restructuring charges, representing changes in our estimates. Loss on extinguishment of debt. This adjustment relates to early termination of a portion of our debt. Adjusting for these losses allows investors to better understand and analyze our core operational performance in the periods shown. MTM adjustments on investments. Unrealized gains/losses result from our equity investments that are accounted for at fair value in non-operating expense. 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. Adjusting for these gains/losses allows investors to better understand and analyze our core operational performance in the periods shown. Total Operating Revenue, adjusted and Total Revenue Per Available Seat Mile ("TRASM"), adjusted Three Months Ended 2Q23 vs 2Q22 (in millions) June 30, 2023 September 30, 2022 June 30, 2022 Total operating revenue $ 15,578 $ 13,975 $ 13,824 Adjusted for: Third-party refinery sales (965) (1,134) (1,514) Total operating revenue, adjusted $ 14,613 $ 12,840 $ 12,311 19% Three Months Ended June 30, 2023 June 30, 2022 % Change TRASM (cents) 22.58 23.47 Adjusted for: Third-party refinery sales (1.40) (2.57) TRASM, adjusted 21.18 20.90 1% Six Months Ended June 30, 2023 June 30, 2022 TRASM (cents) 21.74 20.93 Adjusted for: Third-party refinery sales (1.44) (2.44) TRASM, adjusted 20.30 18.49 Year Ended (in millions) December 31, 2022 Total operating revenue $ 50,582 Adjusted for: Third-party refinery sales (4,977) Total operating revenue, adjusted $ 45,605 Operating Income, adjusted Three Months Ended (in millions) June 30, 2023 June 30, 2022 Operating income $ 2,491 $ 1,519 Adjusted for: MTM adjustments and settlements on hedges 3 (73) Restructuring charges — (1) Operating income, adjusted $ 2,494 $ 1,445 Operating Margin, adjusted Three Months Ended June 30, 2023 June 30, 2022 Operating margin 16.0% 11.0% Adjusted for: MTM adjustments and settlements on hedges — (0.5) Third-party refinery sales 1.1 1.3 Operating margin, adjusted 17.1% 11.7% Pre-Tax Income, Net Income, and DilutedEarnings per Share, adjusted Three Months Ended Three Months Ended June 30, 2023 June 30, 2023 Pre-Tax Income Net Earnings (in millions, except per share data) Income Tax Income Per Diluted Share GAAP $ 2,317 $ (490) $ 1,827 $ 2.84 Adjusted for: MTM adjustments and settlements on hedges 3 Loss on extinguishment of debt 29 MTM adjustments on investments (128) Non-GAAP $ 2,220 $ (498) $ 1,723 $ 2.68 Three Months Ended Three Months Ended June 30, 2022 June 30, 2022 Pre-Tax Income Net Earnings (in millions, except per share data) Income Tax Income Per Diluted Share GAAP $ 1,033 $ (298) $ 735 $ 1.15 Adjusted for: MTM adjustments and settlements on hedges (73) Loss on extinguishment of debt 41 MTM adjustments on investments 221 Restructuring charges (1) Non-GAAP $ 1,222 $ (300) $ 921 $ 1.44 Pre-Tax Margin, adjusted Three Months Ended June 30, 2023 June 30, 2022 Pre-tax margin 14.9% 7.5% Adjusted for: Third-party refinery sales 0.9 1.1 MTM adjustments and settlements on hedges — (0.5) Loss on extinguishment of debt 0.2 0.3 MTM adjustments on investments (0.8) 1.6 Pre-tax margin, adjusted 15.2% 9.9% Operating Cash Flow, adjusted. We present operating cash flow, adjusted because management believes adjusting for the following items provides a more meaningful measure for investors: Net cash flows related to certain airport construction projects and other. Cash flows related to certain airport construction projects are included in our GAAP operating activities. We have adjusted for these items, which were primarily funded by cash restricted for airport construction, to provide investors a better understanding of the company's operating cash flow that is core to our operations in the periods shown. Three Months Ended (in millions) June 30, 2023 June 30, 2022 Net cash provided by operating activities $ 2,609 $ 2,535 Adjustments: Net cash flows related to certain airport construction projects and other 38 (70) Net cash provided by operating activities, adjusted $ 2,648 $ 2,465 Free Cash Flow.We present free cash flow because management believes this metric is helpful to investors to evaluate the company's ability to generate cash that is available for use for debt service or general corporate initiatives. Free cash flow is also used internally as a component of our 2023 incentive compensation program. Free cash flow is defined as net cash from operating activities and net cash from investing activities, adjusted for (i) net purchases/(redemptions) of short-term investments, (ii) strategic investments and related, (iii) net cash flows related to certain airport construction projects and other, (iv) financed aircraft acquisitions and (v) pilot agreement payment. These adjustments are made for the following reasons: Net purchases/(redemptions) of short-term investments.Net purchases/(redemptions) of short-term investments represent the net purchase and sale activity of investments and marketable securities in the period, including gains and losses. We adjust for this activity to provide investors a better understanding of the company's free cash flow generated by our operations. Strategic investments and related. Certain cash flows related to our investments in and related transactions with other airlines are included in our GAAP investing activities. We adjust for this activity because it provides a more meaningful comparison to our airline industry peers. Net cash flows related to certain airport construction projects and other. Cash flows related to certain airport construction projects are included in our GAAP operating activities and capital expenditures. We have adjusted for these items, which were primarily funded by cash restricted for airport construction, to provide investors a better understanding of the company's free cash flow and capital expenditures that are core to our operations in the periods shown. Financed aircraft acquisitions. This adjustment reflects aircraft deliveries that are leased as capital expenditures. The adjustment is based on their original contractual purchase price or an estimate of the aircraft's fair value and provides a more meaningful view of our investing activities. Pilot agreement payment. In the March 2023 quarter, Delta pilots ratified a new four-year Pilot Working Agreement effective January 1, 2023. The agreement includes numerous work rule changes and pay rate increases during thefour-year term, including an initial pay rate increase of 18%. The agreement also includes a provision for a one-time payment made upon ratification in the March 2023 quarter of $735million. We adjust for this item to provide investors a better understanding of our recurring free cash flow generated by our operations. Three Months Ended (in millions) June 30, 2023 June 30, 2022 Net cash provided by operating activities $ 2,609 $ 2,535 Net cash used in investing activities (1,382) (152) Adjusted for: Net purchases/(redemptions) of short-term investments (51) (695) Strategic investments and related — (105) Net cash flows related to certain airport construction projects and other 81 94 Financed aircraft acquisitions (162) (69) Free cash flow $ 1,094 $ 1,608 Six Months Ended (in millions) June 30, 2023 Net cash provided by operating activities $ 4,843 Net cash used in investing activities (2,482) Adjusted for: Net purchases/(redemptions) of short-term investments 50 Net cash flows related to certain airport construction projects and other 101 Financed aircraft acquisitions (299) Pilot agreement payment 735 Free cash flow $ 2,948 Adjusted Net Debt.Delta uses adjusted total debt, including aircraft rent, in addition to adjusted debt and finance leases, to present estimated financial obligations. Delta reduces adjusted total debt by cash, cash equivalents, short-term investments and LGA restricted cash, resulting in adjusted net debt, to present the amount of assets needed to satisfy the debt. Management believes this metric is helpful to investors in assessing the company's overall debt profile. 2Q23 vs (in millions) June 30, 2023 December 31, 2022 June 30, 2022 Debt and finance lease obligations $ 20,205 $ 23,030 $ 24,839 Plus: sale-leaseback financing liabilities 1,912 2,180 2,208 Plus: unamortized discount/(premium) and debt issue cost, net and other 99 138 176 Adjusted debt and finance lease obligations $ 22,216 $ 25,349 $ 27,222 Plus: 7x last twelve months' aircraft rent 3,661 3,558 3,303 Adjusted total debt $ 25,877 $ 28,906 $ 30,525 Less: cash, cash equivalents, short-term investments and LGA restricted cash (6,037) (6,603) (10,948) Adjusted net debt $ 19,841 $ 22,303 $ 19,578 $ (2,462) Adjusted Non-Fuel Cost and Non-Fuel Unit Cost or Cost per Available Seat Mile, ("CASM-Ex") We adjust operating expense and CASM for certain items described above, as well as the following items and reasons described below: Aircraft fuel and related taxes. The volatility in fuel prices impacts the comparability of year-over-year financial performance. 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. Profit sharing. 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. One-time pilot agreement expenses. In the March 2023 quarter, Delta pilots ratified a new four-year Pilot Working Agreement effective January 1, 2023. The agreement includes numerous work rule changes and pay rate increases during the four-year term, including an initial pay rate increase of 18%. The agreement also includes a provision for a one-time payment made upon ratification in the March 2023 quarter of $735 million. Additionally, we recorded adjustments to other benefit-related items of approximately $130 million. Adjusting for these expenses allows investors to better understand and analyze our core cost performance. Three Months Ended (in millions) June 30, 2023 June 30, 2022 Operating Expense $ 13,087 $ 12,305 Adjusted for: Third-party refinery sales (965) (1,514) Aircraft fuel and related taxes (2,516) (3,223) Profit sharing (595) (54) Restructuring charges — 1 Non-Fuel Cost $ 9,011 $ 7,516 Three Months Ended 2Q23 vs 2Q22 June 30, 2023 September 30, 2022 June 30, 2022 CASM (cents) 18.97 19.87 20.89 Adjusted for: Third-party refinery sales (1.40) (1.80) (2.57) Aircraft fuel and related taxes (3.65) (5.26) (5.47) Profit sharing (0.86) (0.38) (0.09) CASM-Ex 13.06 12.43 12.76 2.4% Six Months Ended June 30, 2023 December 31, 2022 June 30, 2022 CASM (cents) 20.04 19.98 20.27 Adjusted for: Third-party refinery sales (1.44) (1.86) (2.44) Aircraft fuel and related taxes (3.98) (5.03) (4.80) Profit sharing (0.51) (0.41) (0.05) One-time pilot agreement expenses (0.66) — — Restructuring charges — 0.10 0.01 CASM-Ex 13.44 12.77 12.98 Operating Expense, adjusted Three Months Ended (in millions) June 30, 2023 June 30, 2022 Operating expense $ 13,087 $ 12,305 Adjusted for: MTM adjustments and settlements on hedges (3) 73 Third-party refinery sales (965) (1,514) Restructuring charges — 1 Operating expense, adjusted $ 12,119 $ 10,866 Total fuel expense, adjusted and Average fuel price per gallon, adjusted Average Price Per Gallon Three Months Ended Three Months Ended June 30, June 30, % Change June 30, June 30, % Change (in millions, except per gallon data) 2023 2022 2023 2022 Total fuel expense $ 2,516 $ 3,223 $ 2.52 $ 3.74 Adjusted for: MTM adjustments and settlements on hedges (3) 73 — 0.08 Total fuel expense, adjusted $ 2,513 $ 3,296 (24)% $ 2.52 $ 3.82 (34)% Average Price Per Gallon Six Months Ended June 30, June 30, (in millions, except per gallon data) 2023 2022 Total fuel expense $ 2.75 $ 3.29 Adjusted for: MTM adjustments and settlements on hedges 0.02 0.05 Total fuel expense, adjusted $ 2.77 $ 3.34 Gross Capital Expenditures. We adjust capital expenditures for the following items to determine gross capital expenditures for the reasons described below: Financed aircraft acquisitions. This adjusts capital expenditures to reflect aircraft deliveries that are leased as capital expenditures. The adjustment is based on their original contractual purchase price or an estimate of the aircraft's fair value and provides a more meaningful view of our investing activities. Net cash flows related to certain airport construction projects. Cash flows related to certain airport construction projects are included in capital expenditures. 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. Three Months Ended (in millions) June 30, 2023 June 30, 2022 Flight equipment, including advance payments $ 1,074 $ 603 Ground property and equipment, including technology 378 355 Adjusted for: Financed aircraft acquisitions 162 69 Net cash flows related to certain airport construction projects (42) (163) Gross capital expenditures $ 1,572 $ 864 SOURCE Delta Air Lines View All News Delta Air Lines Announces June Quarter 2023 Financial Results
*Includes cash and cash equivalents, short-term investments and undrawn revolving credit facilities
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Statements made in this press release that are not historical facts, including statements regarding our estimates, expectations, beliefs, intentions, projections, goals, aspirations, commitments or strategies for the future, should be considered "forward-looking statements" under the Securities Act of 1933, as amended, the Securities Exchange Act of 1934, as amended, and the Private Securities Litigation Reform Act of 1995. Such statements are not guarantees or promised outcomes and should not be construed as such. 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. These risks and uncertainties include, but are not limited to, the impact of incurring significant debt in response to the COVID-19 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, which could compromise the data stored within them, as well as failure to comply with ever-evolving global privacy and security regulatory obligations or adequately address increasing customer focus on privacy issues and data security; 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 on our business of seasonality and other factors beyond our control, including severe weather conditions, natural disasters or other environmental events, including from the impact of climate change; changes in the cost of aircraft fuel; extended disruptions in the supply of aircraft fuel, including from Monroe Energy, LLC ("Monroe"), a wholly-owned subsidiary of Delta; 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; significant damage to our reputation and brand, including from exposure to significant adverse publicity or inability to achieve certain sustainability goals; our ability to retain senior management and other key employees, and to maintain our company culture; disease outbreaks, such as the COVID-19 pandemic or similar public health threats, and measures implemented to combat them; 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 but not limited to increased regulation to reduce emissions and other risks associated with climate change, and the cost of compliance with more stringent environmental regulations; and unfavorable economic or political conditions in the markets in which we operate or volatility in currency exchange rates.
such amounts shown above:
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4Q22
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Delta Air Lines Announces June Quarter 2023 Financial Results (2024)
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