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Delta Air Lines Announces $158 Million Quarterly Profit and $1.4 Billion Annual Profit, Excluding Special Items

Reports GAAP quarterly profit of $19 million and annual profit of $593 million

Jan 18, 2011

ATLANTA, Jan. 18, 2011 /PRNewswire/ -- Delta Air Lines (NYSE: DAL) today reported financial results for the December 2010 quarter.  Key points include:

  • Delta's net income for the December 2010 quarter was $158 million, or $0.19 per diluted share, excluding special items(1).  This is a $383 million improvement year over year.  
  • Delta's GAAP net income was $19 million, or $0.02 per diluted share, for the December 2010 quarter.
  • Delta's net income for 2010 was $1.4 billion, excluding special items.  Including $851 million in special items, Delta's net income for 2010 was $593 million.
  • 2010 results include $313 million in profit sharing expense, including $38 million in the December quarter, in recognition of Delta employees' achievements toward meeting the company's financial targets.
  • Delta's adjusted net debt at the end of 2010 was $15.0 billion, a $2.0 billion reduction from prior year.
  • Delta ended 2010 with $5.2 billion in unrestricted liquidity.

"Our 2010 results are among the best in Delta's history.  They would not have been possible without the dedication and determination of Delta employees worldwide and we are pleased we will pay more than $300 million in profit sharing for 2010," said Richard Anderson, Delta's chief executive officer.  "These results are a direct reflection of the success of our merger, cost discipline and debt reduction strategy and give us momentum to deal with the rising fuel prices we face in 2011."  

(Logo:  http://photos.prnewswire.com/prnh/20101123/CL04792LOGO )

Revenue Environment

Total operating revenue for the December 2010 quarter was $7.8 billion, an increase of $1.0 billion, or 14%, compared to the same period last year.

  • Passenger revenue increased 15%, or $889 million, compared to the prior year period on 7% higher capacity.  Passenger unit revenue (PRASM) increased 8%, driven by a 9% improvement in yield.
  • Cargo revenue decreased 7%, or $17 million, due to the elimination of freighter operations, partially offset by higher volume and yield.
  • Other, net revenue increased 14%, or $112 million, primarily due to higher SkyMiles revenue and revenues from ancillary products and services.

Comparisons of revenue-related statistics are as follows:






Increase (Decrease)





4Q10 versus 4Q09





Change

Unit



Passenger Revenue

4Q10 ($M)


YOY

Revenue

Yield

Capacity


Domestic

2,927


11 %

5 %

5 %

6 %


Atlantic

1,226


21 %

8 %

10 %

12 %


Pacific

721


47 %

24 %

26 %

18 %


Latin America

364


13 %

19 %

18 %

(5) %


Total mainline

5,238


17 %

8 %

9 %

8 %


Regional

1,430


9 %

9 %

10 %

0 %


Consolidated

6,668


15 %

8 %

9 %

7 %












"Through the momentum we built in 2010, we expect to maintain our March quarter margins year over year despite more than $350 million in higher costs from the recent steep run-up in fuel prices," said Ed Bastian, Delta's president.  "Industry-wide fare increases, combined with growth in Delta's ancillary products and services, will provide a more long-term, revenue-based solution to addressing the high fuel environment."

Cost Performance

In the December 2010 quarter, operating expense increased $644 million year over year due to higher fuel price, volume- and revenue-related expenses, and profit sharing expense, which were partially offset by incremental merger cost synergies.

Consolidated unit cost (CASM[2]), excluding fuel, profit sharing and special items, decreased 2% in the December 2010 quarter on a year-over-year basis, on 7% higher capacity.  Consolidated CASM, including fuel, profit sharing and special items, increased 2%.

Non-operating expense excluding special items decreased $67 million due to benefits from Delta's debt reduction initiatives.  Including special items, non-operating expense was $36 million lower than in the December 2009 quarter.

Fuel Price and Related Hedges

Delta hedged 58% of its fuel consumption for the December 2010 quarter for an average fuel price(3) of $2.47 per gallon.  The table below represents 2011 fuel hedges in place as of Jan. 14, 2011:



1Q11

2Q11

3Q11

4Q11

Call options

15%

26%

20%

15%

Collars

19%

9%

12%

0%

Swaps

15%

6%

4%

2%

Total

49%

41%

36%

17%






Average crude call strike

$ 84

$ 87

$ 86

$ 87

Average crude collar cap

90

84

89

-

Average crude collar floor

75

73

76

-

Average crude swap

85

91

83

89




Liquidity Position

As of Dec. 31, 2010, Delta had $5.2 billion in unrestricted liquidity, including $3.6 billion in cash and short-term investments, and $1.6 billion in undrawn revolving credit facilities.  During the December 2010 quarter, operating cash flow was $318 million, driven by the company's profitability partially offset by the normal seasonal decline in advance ticket sales.  Free cash flow was $52 million in the December 2010 quarter and $1.6 billion for the full year.  

Cash used in investing during the quarter was $266 million, which included $178 million for investments in aircraft, parts and modifications, as the company began the previously announced investment in its fleet, including winglets, flat-bed seats and enhanced in-seat entertainment.

Debt payments in the December 2010 quarter were $1.3 billion and the company issued $987 million of debt, primarily to refinance a portion of its aircraft debt maturities.  During the quarter, Delta completed a $474 million debt offering and received $270 million in proceeds.  The remaining $204 million will be held in escrow until additional aircraft are refinanced, including 10 aircraft in Delta's 2001-1 enhanced equipment trust certificates, which mature in September 2011.

At Dec. 31, Delta's adjusted net debt was $15.0 billion, a $2.0 billion reduction from Dec. 31, 2009.

"Through the hard work of the Delta team, we ended 2010 with flat non-fuel unit costs and a $2 billion reduction in adjusted net debt, meeting two of our key financial commitments for the year," said Hank Halter, Delta's chief financial officer.  "To mitigate the pressure on our business from higher fuel prices in 2011, we remain committed to maintaining a competitive cost structure and paying down debt."

Company Highlights

Delta has a strong commitment to employees, customers and the communities it serves.  Key accomplishments in 2010 include:

  • Accruing more than $300 million in employee profit sharing, in recognition of the achievements of all Delta employees toward meeting the company's financial targets;
  • Taking major steps toward resolving remaining representation issues, as Delta employees in five elections voted to keep the direct relationship and culture that Delta has maintained over the decades;
  • Implementing a more than $2 billion investment – Delta's largest product investment in a decade – in improved products, services and airport facilities through 2013, including an expanded international terminal in New York-JFK; full flat-bed seats in BusinessElite and individual in-seat entertainment throughout both cabins on all transoceanic aircraft; expanding Wi-Fi to all two-class jets; and improving fuel efficiency by adding winglets to 44 more aircraft in Delta's fleet;
  • Celebrating the 10th anniversary of SkyTeam; welcoming Vietnam Airlines and TAROM, Romania's flag carrier, into SkyTeam; and supporting the applications of China Eastern, Aerolineas Argentinas' and Garuda Indonesia to join SkyTeam;
  • Extending Delta's reach through alliance and codeshare partnerships, including the addition of Alitalia to Delta's industry-leading joint venture with Air France-KLM; signing a new codeshare agreement with Hawaiian Airlines that will offer Delta's customers access to connecting flights within the Hawaiian Islands; and announcing plans to codeshare with GOL airlines, a Brazilian carrier;
  • Expanding Delta's network to offer customers the routes they want worldwide by announcing more frequencies between Delta's U.S. gateways and London-Heathrow; new service to Tokyo-Haneda and the Pacific island of Palau; and increased service to Africa, Shanghai, Manila, Beijing, Guangzhou and Reykjavík, Iceland;
  • Launching a dedicated customer service channel enabling customers to contact Delta in real-time through @DeltaAssist on Twitter; and
  • Furthering Delta's commitment to the communities it serves by raising $1 million in donations for Martin Luther King Jr. National Memorial in Washington, D.C.; pledging $1 million to Atlanta's National Center for Civil and Human Rights and $2 million to Grady Health Foundation in Atlanta; and building houses with Habitat for Humanity in nine U.S. states and Chile.

Special Items

Delta recorded special items totaling $139 million in the December 2010 quarter, including:

  • $88 million in merger-related expenses;
  • $31 million from a loss on extinguishment of debt; and
  • $20 million in costs related to the consolidation of operations at Cincinnati/Northern Kentucky International Airport.

Delta recorded special items totaling a net $200 million credit in the December 2009 quarter, including:

  • $121 million in primarily merger-related expenses; and
  • $321 million non-cash tax benefit related to the impact of fuel hedges in other comprehensive income.

March 2011 Quarter Guidance

Following are Delta's projections for the March 2011 quarter.



1Q 2011 Forecast



Operating margin

1 – 3%

Fuel price, including taxes and hedges

$2.60

Capital expenditures

$375 million

Total liquidity at end of period

$5.3 billion




1Q 2011 Forecast (compared to 1Q 2010)



Consolidated unit costs – excluding fuel expense

Flat – up 2 %



System capacity

Up 5 – 7 %

    Domestic

Flat – up 2 %

    International

Up 12 – 14 %



Mainline capacity

Up 6 – 8 %

    Domestic

Flat – up 2 %

    International

Up 12 – 14 %




Other Matters

Included with this press release are Delta's unaudited Consolidated Statements of Operations for the three and twelve months ended Dec. 31, 2010 and 2009; a statistical summary for those periods; selected balance sheet data as of Dec. 31, 2010 and 2009; and a reconciliation of certain non-GAAP financial measures.

About Delta

Delta Air Lines serves more than 160 million customers each year. With an industry-leading global network, Delta and the Delta Connection carriers offer service to 357 destinations in 67 countries on six continents. Headquartered in Atlanta, Delta employs more than 75,000 employees worldwide and operates a mainline fleet of more than 700 aircraft. A founding member of the SkyTeam global alliance, Delta participates in the industry's leading trans-Atlantic joint venture with Air France-KLM and Alitalia. Including its worldwide alliance partners, Delta offers customers more than 13,000 daily flights, with hubs in Amsterdam, Atlanta, Cincinnati, Detroit, Memphis, Minneapolis-St. Paul, New York-JFK, Paris-Charles de Gaulle, Salt Lake City and Tokyo-Narita. The airline's service includes the SkyMiles frequent flier program, the world's largest airline loyalty program; the award-winning BusinessElite service; and more than 50 Delta Sky Clubs in airports worldwide. Delta is investing more than $2 billion through 2013 in airport facilities and global products, services and technology to enhance the customer experience in the air and on the ground. Customers can check in for flights, print boarding passes, check bags and review 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)  Delta excludes from consolidated unit cost ancillary businesses which are not related to the generation of a seat mile, including aircraft maintenance and staffing services which Delta provides to third parties, Delta's vacation wholesale operations (MLT) and Delta's dedicated freighter operations, which the company discontinued on Dec. 31, 2009. Management believes this classification provides a more consistent and comparable reflection of Delta's consolidated operations.

(3)  Delta's December 2010 quarter average fuel price of $2.47 per gallon reflects the consolidated cost per gallon for mainline and regional operations, including contract carrier operations, net of fuel hedge impact.

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 a global recession; the effects of a 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 our 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; the effects of weather, natural disasters and seasonality on our business; 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 Dec. 31, 2009 and our Quarterly Report on Form 10-Q for the quarterly period ended Sep. 30, 2010.  Caution should be taken not to place undue reliance on our forward-looking statements, which represent our views only as of Jan. 18, 2011, and which we have no current intention to update.


DELTA AIR LINES, INC.

Consolidated Statements of Operations

(Unaudited)



Three Months Ended Dec. 31,





(in millions, except per share data)

2010


2009


$ Change


% Change










Operating Revenue:









Passenger:









   Mainline

$  5,238


$  4,469


$  769


17%


   Regional carriers

1,430


1,310


120


9%


 Total passenger revenue

6,668


5,779


889


15%


Cargo

236


253


(17)


(7)%


Other, net

885


773


112


14%


 Total operating revenue

7,789


6,805


984


14%










Operating Expense:









Aircraft fuel and related taxes

1,928


1,706


222


13%


Salaries and related costs

1,708


1,687


21


1%


Contract carrier arrangements(1)

1,180


941


239


25%


Aircraft maintenance materials and outside repairs

395


284


111


39%


Contracted services

393


419


(26)


(6)%


Depreciation and amortization

372


384


(12)


(3)%


Passenger commissions and other selling expenses

364


336


28


8%


Landing fees and other rents

313


318


(5)


(2)%


Passenger service

180


161


19


12%


Aircraft rent

82


117


(35)


(30)%


Profit sharing

38


-


38


NM


Restructuring and merger-related items

108


121


(13)


(11)%


Other

434


377


57


15%


 Total operating expense

7,495


6,851


644


9%










Operating Income (Loss)

294


(46)


340


NM










Other (Expense) Income:









Interest expense

(224)


(261)


37


(14)%


Amortization of debt discount, net

(46)


(66)


20


(30)%


Interest income

5


4


1


25%


Loss on extinguishment of debt

(31)


-


(31)


NM


Miscellaneous, net

23


14


9


64%


 Total other expense, net

(273)


(309)


36


(12)%










Income (Loss) Before Income Taxes

21


(355)


376


NM










Income Tax (Provision) Benefit

(2)


330


(332)


NM










Net Income (Loss)

$  19


$  (25)


$  44


NM










Basic Earnings (Loss) per Share

$  0.02


$  (0.03)





Diluted Earnings (Loss) per Share

$  0.02


$  (0.03)














Basic Weighted Average Shares Outstanding

836


830





Diluted Weighted Average Shares Outstanding

845


830














(1)  Contract carrier arrangements expense includes $384 million and $249 million for the three months ended Dec. 31, 2010 and 2009, respectively, for aircraft fuel and related taxes.  The operations under contract carrier arrangements with Mesaba and Compass Airlines are included only for the three months ended Dec. 31, 2010 because those companies were wholly-owned subsidiaries of Delta until Delta sold them on July 1, 2010.




DELTA AIR LINES, INC.

Consolidated Statements of Operations

(Unaudited)




Year Ended Dec. 31,





(in millions, except per share data)

2010


2009


$ Change


% Change










Operating Revenue:









Passenger:









   Mainline

$  21,408


$  18,522


$  2,886


16%


   Regional carriers

5,850


5,285


565


11%


 Total passenger revenue

27,258


23,807


3,451


14%


Cargo

850


788


62


8%


Other, net

3,647


3,468


179


5%


 Total operating revenue

31,755


28,063


3,692


13%










Operating Expense:









Aircraft fuel and related taxes

7,594


7,384


210


3%


Salaries and related costs

6,751


6,838


(87)


(1)%


Contract carrier arrangements(1)

4,305


3,823


482


13%


Aircraft maintenance materials and outside repairs

1,569


1,434


135


9%


Contracted services

1,549


1,595


(46)


(3)%


Depreciation and amortization

1,511


1,536


(25)


(2)%


Passenger commissions and other selling expenses

1,509


1,405


104


7%


Landing fees and other rents

1,281


1,289


(8)


(1)%


Passenger service

673


638


35


5%


Aircraft rent

387


480


(93)


(19)%


Profit sharing

313


-


313


NM


Restructuring and merger-related items

450


407


43


11%


Other

1,646


1,558


88


6%


 Total operating expense

29,538


28,387


1,151


4%










Operating Income (Loss)

2,217


(324)


2,541


NM










Other (Expense) Income:









Interest expense

(1,004)


(908)


(96)


11%


Amortization of debt discount, net

(216)


(370)


154


(42)%


Interest income

35


27


8


30%


Loss on extinguishment of debt

(391)


(83)


(308)


NM


Miscellaneous, net

(33)


77


(110)


NM


 Total other expense, net

(1,609)


(1,257)


(352)


28%










Income (Loss) Before Income Taxes

608


(1,581)


2,189


NM










Income Tax (Provision) Benefit

(15)


344


(359)


NM










Net Income (Loss)

$  593


$  (1,237)


$  1,830


NM










Basic Earnings (Loss) per Share

$  0.71


$  (1.50)





Diluted Earnings (Loss) per Share

$  0.70


$  (1.50)














Basic Weighted Average Shares Outstanding

834


827





Diluted Weighted Average Shares Outstanding

843


827














(1)  Contract carrier arrangements expense includes $1.3 billion and $907 million for the twelve months ended Dec. 31, 2010 and 2009, respectively, for aircraft fuel and related taxes.  The operations under contract carrier arrangements with Mesaba and Compass Airlines are included only from July 1 through Dec. 31, 2010 because these companies were wholly-owned subsidiaries of Delta until Delta sold them on July 1, 2010.




DELTA AIR LINES, INC.

Selected Balance Sheet Data






Dec. 31,


Dec. 31,

(in millions)


2010


2009



(Unaudited)



Cash and cash equivalents


$ 2,892


$ 4,607

Short-term investments


718


71

Restricted cash, cash equivalents and short-term investments    

    (short-term and long-term)


447


444

Total assets


43,184


43,789

Total debt and capital leases, including current maturities


15,252


17,198

Total stockholders' equity


611


245









DELTA AIR LINES, INC.

Combined Statistical Summary

(Unaudited)








Three Months Ended Dec. 31,







2010


2009


Change











Consolidated(1):









Revenue Passenger Miles (millions)


46,233


43,559


6%



Available Seat Miles (millions)


57,027


53,324


7%



Passenger Mile Yield


14.42

(cents)

13.27

(cents)

9%



Passenger Revenue per Available Seat Mile (PRASM)


11.69

(cents)

10.84

(cents)

8%



Operating Cost Per Available Seat Mile (CASM)


12.83

(cents)

12.52

(cents)

2%



    CASM excluding Fuel and Certain Items(2) - See Note A

8.52

(cents)

8.68

(cents)

(2)%



Passenger Load Factor


81.1  

%

81.7  

%

(0.6)

pts


Fuel Gallons Consumed (millions)


936


902


4%



Average Price Per Fuel Gallon, Net of Hedging Activity


$ 2.47


$ 2.17


14%



Number of Aircraft in Fleet, End of Period


815


983


(168)

Aircraft


Full-Time Equivalent Employees, End of Period


79,684


81,106


(2)%











Mainline:









Revenue Passenger Miles (millions)


40,267


37,537


7%



Available Seat Miles (millions)


49,286


45,582


8%



Operating Cost Per Available Seat Mile (CASM)


11.82

(cents)

11.44

(cents)

3%



    CASM excluding Fuel and Certain Items - See Note A


7.75

(cents)

7.80

(cents)

(1)%



Fuel Gallons Consumed (millions)


758


728


4%



Average Price Per Fuel Gallon, Net of Hedging Activity


$ 2.46


$ 2.17


13%



Number of Aircraft in Fleet, End of Period


722


740


(18)

Aircraft



(1)  Except for full-time equivalent employees and number of aircraft in fleet, data presented includes operations under our contract carrier arrangements.

(2)  Excludes $384 million and $249 million for the December 2010 and 2009 quarters, respectively, for fuel expense incurred under contract carrier arrangements.



DELTA AIR LINES, INC.

Combined Statistical Summary

(Unaudited)








Year Ended Dec. 31,







2010


2009


Change











Consolidated(1):









Revenue Passenger Miles (millions)


193,169


188,943


2%



Available Seat Miles (millions)


232,684


230,331


1%



Passenger Mile Yield


14.11

(cents)

12.60

(cents)

12%



Passenger Revenue per Available Seat Mile (PRASM)


11.71

(cents)

10.34

(cents)

13%



Operating Cost Per Available Seat Mile (CASM)


12.41

(cents)

12.01

(cents)

3%



    CASM excluding Fuel and Certain Items (2) - See Note A

8.27

(cents)

8.28

(cents)

0%



Passenger Load Factor


83.0    

%

82.0    

%

1.0

pts


Fuel Gallons Consumed (millions)


3,823


3,853


(1)%



Average Price Per Fuel Gallon, Net of Hedging Activity


$ 2.33


$ 2.15


8%



Number of Aircraft in Fleet, End of Period


815


983


(168)

Aircraft


Full-Time Equivalent Employees, End of Period


79,684


81,106


(2)%











Mainline:









Revenue Passenger Miles (millions)


168,180


163,706


3%



Available Seat Miles (millions)


200,814


197,723


2%



Operating Cost Per Available Seat Mile (CASM)


11.33

(cents)

11.04

(cents)

3%



    CASM excluding Fuel and Certain Items - See Note A


7.46

(cents)

7.40

(cents)

1%



Fuel Gallons Consumed (millions)


3,094


3,106


0%



Average Price Per Fuel Gallon, Net of Hedging Activity


$ 2.32


$ 2.23


4%



Number of Aircraft in Fleet, End of Period


722


740


(18)

Aircraft



(1)  Except for full-time equivalent employees and number of aircraft in fleet, data presented includes operations under our contract carrier arrangements.

(2)  Excludes $1.3 billion and $907 million for the years ended Dec. 31, 2010 and 2009, respectively, for fuel expense incurred under contract carrier arrangements.



Note A: The following tables show reconciliations of non-GAAP financial measures.  The reasons Delta uses these measures are described below.

  • We sometimes use information that is derived from our Consolidated Financial Statements, but that is not presented in accordance with accounting principles generally accepted in the U.S. ("GAAP"). Certain of this information is considered "non-GAAP financial measures" under the U.S. Securities and Exchange Commission rules.  The non-GAAP financial measures should be considered in addition to results prepared in accordance with GAAP, but should not be considered a substitute for or superior to GAAP results.

  • Delta is unable to reconcile certain forward-looking projections to GAAP, including projected consolidated non-fuel 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 presents cash used in investing and investments in aircraft, parts and modifications because management believes these metrics are helpful to investors to evaluate the company's investing activities.

  • Delta presents total debt payments because management believes this metric is helpful to investors to evaluate the company's debt-related activities.

  • Delta presents free cash flow because management believes this metric is helpful to investors to evaluate the company's ability to generate cash.

  • Delta uses adjusted total debt, including aircraft rent, in addition to long-term adjusted debt and capital leases, to present estimated financial obligations. Delta reduces adjusted total debt by cash, cash equivalents and short-term investments, resulting in adjusted net debt, to present the amount of additional assets needed to satisfy the debt.

  • 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 businesses include aircraft maintenance and staffing services Delta provides to third parties, Delta's vacation wholesale operations and its dedicated freighter operations, which we discontinued on Dec. 31, 2009.

  • Delta excludes profit sharing expense from consolidated and Mainline CASM because management believes the exclusion of this item provides a more meaningful comparison of the Company's CASM to the airline industry and prior year results.




Three Months Ended Dec. 31,


Year Ended

(in millions)

2010


2009


Dec. 31, 2010

Net income (loss)

$ 19


$ (25)


$ 593

Items excluded:






Restructuring and merger-related items

108


121


450

Loss on extinguishment of debt

31


-


391

Income tax benefit related to other comprehensive income

-


(321)


-

Other

-


-


10

Net income excluding special items

$ 158


$ (225)


$ 1,444

Diluted weighted average shares outstanding

845





Earnings per share excluding special items

$ 0.19











Three Months Ended Dec. 31,

(in millions)

2010


2009

Non operating expense

$ 273


$ 309

Item excluded:




Loss on extinguishment of debt

(31)


-

Non-operating expense excluding special items

$ 242


$ 309







Three Months Ended

(in millions)

Dec. 31, 2010

Flight equipment, including advance payments (GAAP)

$ 302

Adjustments:


Payments under seller financing

(124)

Investments in aircraft, parts and modifications

$ 178







Three Months Ended

(in billions)

Dec. 31, 2010

Payment on long-term debt and capital lease obligations

$ 1.2

Adjustments:


Payments under seller financing

0.1

Total debt payments

$ 1.3






Three Months Ended


Dec. 31, 2010

(in millions)



Net cash provided by operating activities (GAAP)


$ 318

Net cash used in investing activities  (GAAP)

(669)


Adjustments:



Purchase of short-term investments

279


Payments under seller financing

124


Cash used in investing


(266)

Total free cash flow


$ 52






Year Ended


Dec. 31, 2010

(in billions)


Net cash provided by operating activities (GAAP)

$ 2.8

Net cash used in investing activities  (GAAP)

(2.0)

Adjustments:


Purchase of short-term investments

0.7

Payments under seller financing

0.1

Total free cash flow

$ 1.6





(in billions)

Dec. 31, 2010


Dec. 31, 2009

Debt and capital lease obligations

$ 15.3



$ 17.2


Plus: unamortized discount, net from purchase accounting and fresh start reporting

0.6



1.1


Adjusted debt and capital lease obligations


$ 15.9



$ 18.3

Plus: 7x last twelve months' aircraft rent


2.7



3.4

Adjusted total debt


18.6



21.7

Less: cash, cash equivalents and short-term investments


(3.6)



(4.7)

Adjusted net debt


$ 15.0



$17.0






Three Months Ended Dec. 31,


Year Ended Dec. 31,



2010


2009


2010


2009


CASM

13.14

(cents)

12.85

(cents)

12.69

(cents)

12.32

(cents)

Ancillary businesses

(0.31)


(0.33)


(0.28)


(0.31)


CASM excluding items not related to generation of a seat mile

12.83

(cents)

12.52

(cents)

12.41

(cents)

12.01

(cents)

Items excluded:









Restructuring and merger-related items

(0.19)


(0.23)


(0.19)


(0.18)


Profit sharing

(0.07)


-


(0.13)


-


Aircraft fuel and related taxes

(4.05)


(3.61)


(3.82)


(3.55)


CASM excluding certain items

8.52

(cents)

8.68

(cents)

8.27

(cents)

8.28

(cents)















Three Months Ended Dec. 31,


Year Ended Dec. 31,


(in millions, except per cent data)

2010


2009


2010


2009


Consolidated operating expense

$ 7,495


$ 6,851


$ 29,538


$ 28,387


Less regional carriers operating expense

(1,512)


(1,460)


(6,207)


(5,807)


Mainline operating expense

$ 5,983


$ 5,391


$ 23,331


$22,580


Mainline CASM

12.14

(cents)

11.83

(cents)

11.62

(cents)

11.42

(cents)

Ancillary businesses

(0.32)


(0.39)


(0.29)


(0.38)


Mainline CASM excluding items not related to generation of a seat mile

11.82

(cents)

11.44

(cents)

11.33

(cents)

11.04

(cents)

Items excluded:









Restructuring and merger-related items

(0.21)


(0.26)


(0.14)


(0.20)


Profit sharing

(0.08)


-


(0.16)


-


Aircraft fuel and related taxes

(3.78)


(3.38)


(3.57)


(3.44)


Mainline CASM excluding certain items

7.75

(cents)

7.80

(cents)

7.46

(cents)

7.40

(cents)













SOURCE Delta Air Lines

For further information: Investor Relations, +1-404-715-2170, or Corporate Communications, +1-404-715-2554, media@delta.com, news archive at news.delta.com


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