ATLANTA, Oct. 22 /PRNewswire-FirstCall/ -- Delta Air Lines (NYSE: DAL) today reported financial results for the September 2009 quarter. Key points include:

  • Delta's net income for the September 2009 quarter was $51 million, or $0.06 per share, excluding $212 million in special items(1). This result is $115 million better than prior year on a combined basis(2).
  • Delta's reported net loss for the September 2009 quarter was $161 million, or $0.19 per share.
  • Delta raised $600 million in incremental liquidity, addressed 40% of 2010 debt maturities and ended the September 2009 quarter with $5.8 billion in unrestricted liquidity.
  • Delta has achieved $500 million in merger benefits in the first three quarters of 2009, reaching its 2009 target ahead of plan.
  • Delta's 2010 system capacity is expected to decline approximately 3% compared to 2009.

"Our ability to earn a profit for the quarter shows we are making sound decisions for our business in this difficult economic environment. While we now see encouraging revenue and booking trends, we remain cautious in these early stages of an uncertain recovery," said Richard Anderson, Delta's chief executive officer. "My thanks go out to the Delta people who delivered great customer service, ran a solid operation, and moved forward with our merger integration, all against the backdrop of a very challenging economy."

(Logo: http://www.newscom.com/cgi-bin/prnh/20090202/DELTALOGO )

Revenue Environment

Delta's operating revenue on a GAAP(3) basis grew 32% to $7.6 billion in the September 2009 quarter compared to the prior year period as a result of its merger with Northwest Airlines. On a combined basis, total operating revenue declined $2.0 billion, or 21%, and total unit revenue (RASM) declined 17%.

    (in millions)     3Q09     3Q08     Incr     3Q09      3Q08      Incr
                      GAAP     GAAP    (Decr)    GAAP    Combined   (Decr)
                      -----    -----   ------    -----   --------   -------

     Passenger       $6,524  $4,978      31%  $6,524    $8,329      (22)%
     Cargo              177     162       9%     177       364      (51)%
     Other, net         873     579      51%     873       839        4%
                        ---     ---              ---       ---
     Total Operating
      Revenue        $7,574  $5,719      32%  $7,574    $9,532      (21)%
                     ------  ------           ------    ------


On a combined basis:

  • Total operating revenue declined 21% versus prior year due to the global economic recession.
  • Passenger revenue decreased 22%, or $1.8 billion, compared to the prior year period due to the global economic recession and a 4% capacity reduction. Passenger unit revenue (PRASM) declined 18%, driven by a 19% decline in yield.
  • Cargo revenue declined 51%, or $187 million, reflecting lower volume and yields. Freighter capacity was 38% lower year over year as a result of the actions Delta is taking to discontinue freighter flying by the end of 2009.
  • Other, net revenue grew 4%, or $34 million, primarily due to increased baggage fee revenue.

Comparisons of revenue-related statistics are as follows:

                                          Increase (Decrease)
                                    3Q09 (GAAP) versus 3Q08 (Combined)
                                    ----------------------------------
                       3Q09 ($M)   Change      Unit
                         GAAP       YOY       Revenue     Yield    Capacity
                       --------- --------------------------------- --------

     Passenger Revenue
         Domestic       $2,901     (19.7)%    (16.8)%     (17.2)%   (3.5)%
         Atlantic        1,353     (30.1)%    (22.7)%     (25.8)%   (9.6)%
         Latin America     294     (22.2)%    (18.2)%     (20.3)%   (4.9)%
         Pacific           574     (27.8)%    (25.8)%     (23.9)%   (2.7)%
                           ---
         Total mainline  5,122     (23.8)%    (19.5)%     (20.6)%   (5.3)%
         Regional        1,402     (12.8)%    (14.0)%     (15.6)%    1.5%
                         -----
         Consolidated   $6,524     (21.7)%    (18.1)%     (19.1)%   (4.4)%


"The global recession drove a significant revenue decline for the quarter, but we see improving trends in load factors, yield and business traffic," said Edward Bastian, Delta's president. "We will continue to exercise capacity restraint, coupled with strong cost control to effectively manage this."

Cost Discipline

In the September 2009 quarter, Delta's operating expense on a GAAP basis increased $1.8 billion year over year due to the impact of the company's merger with Northwest Airlines, partially offset by lower fuel price. On a combined basis, excluding special items, operating expense decreased $2.1 billion due to lower fuel expense, productivity improvements and merger benefits.

     (in millions, except where noted)

               3Q09        3Q08        Incr     3Q09       3Q08       Incr
               GAAP        GAAP       (Decr)    GAAP     Combined    (Decr)
               ----        ----       ------    ----     --------    ------

    Operating
     expense  $7,370      $5,588        32%   $7,370      $9,619       (23)%
    Operating
     expense
     ex-
     special
     items    $7,241      $5,564        30%   $7,241      $9,316       (22)%
    Consoli-
     dated
     CASM      11.56 cents 13.47 cents (14)%   11.56 cents 14.30 cents (19)%
    Consoli-
     dated
     CASM
     ex-fuel
     expense
     and
     special
     items      7.82 cents  7.66 cents   2%     7.82 cents  7.63 cents   2%
    Mainline
     CASM      10.54 cents 11.82 cents (11)%   10.54 cents 13.13 cents (20)%
    Mainline
     CASM
     ex-fuel
     expense
     and
     special
     items      6.94 cents  6.58 cents   5%     6.94 cents  6.81 cents   2%
    Non-
     operating
     expense    $383        $181       112%     $383        $277        38%


On a combined basis:

  • Both consolidated and mainline unit cost (CASM(4)), excluding fuel expense and special items, increased 2% year over year in the September 2009 quarter due to higher pension expense.
  • Non-operating expenses excluding special items increased $23 million in the September 2009 quarter primarily due to non-cash debt discount amortization.

"Despite our significant capacity reductions, Delta successfully mitigated unit cost pressures through improved productivity, strong cost discipline and accelerating our merger synergies," said Hank Halter, chief financial officer. "While we have additional cost pressures in the fourth quarter from new capacity reductions, we expect to offset most, if not all, of this impact."

Liquidity Position

As of Sept. 30, 2009, Delta had $5.8 billion in unrestricted liquidity, including $5.5 billion in cash, cash equivalents and short-term investments and $300 million available in an undrawn revolving credit facility.

During the September 2009 quarter, Delta completed $2.1 billion in new financing transactions, addressing 40% of 2010 debt maturities and generating $600 million in incremental liquidity. The new financing consisted of $1.35 billion of secured notes, a $500 million revolving credit facility and a $250 million term loan facility, all of which were secured by the airline's Pacific routes and related assets.

During the quarter, the company made $1.2 billion of debt and capital lease payments which includes $900 million for the Northwest bank credit facility. In addition the company amended Northwest's revolving credit facility to reduce the total borrowing capacity from $500 million to $300 million.

Capital expenditures during the quarter were approximately $150 million, which includes $75 million for investments in aircraft, parts and modifications.

Merger with Northwest

Through the first three quarters of 2009, Delta has achieved $500 million in synergy benefits from its merger with Northwest Airlines, reaching its 2009 target ahead of plan. The company now expects to generate $700 million in total merger synergies in 2009. Synergies achieved to date include improved revenue from increased market share and Delta's affinity card agreement. In addition, cost reductions have been achieved from streamlined overhead, facilities and technology, elimination of dedicated freighter flying and supply chain savings.

The company is on track in its integration efforts and expects to obtain a Single Operating Certificate by the end of 2009. Recent achievements include:

  • Creating the world's largest airline loyalty program by combining the Northwest WorldPerks program and Delta SkyMiles;
  • Relocating the Northwest System Operations Center from Minneapolis to Delta's Operations Control Center in Atlanta;
  • Transitioning reservations agents in five pre-merger Northwest call centers to the Delta Reservations system;
  • Continuing pilot and flight attendant training to prepare for single carrier operations;
  • Renegotiating more than 600 corporate contracts to date, generating incremental business traffic;
  • Re-branding more than 240 airports to provide consistent Delta branding at more than 98% of airports served worldwide; and
  • Painting more than 230 pre-merger Northwest aircraft in the Delta livery.

Fuel Price and Related Hedges

Delta hedged 53% of its fuel consumption for the September 2009 quarter, which resulted in $226 million in realized fuel hedge losses and premiums for the period. As a result, Delta's average fuel price(5) for the September 2009 quarter was $2.13 per gallon, which includes $0.11 per gallon associated with fuel hedge losses.

The table below represents the fuel hedges Delta had in place as of Oct. 16, 2009:

                                 4Q09      1Q10      2Q10      3Q10
                                 ----------------------------------
    Call options                  22%       24%       11%        3%
    Collars                        -         3%        -         -
    Swaps                         17%        1%        -         -
                                 ----------------------------------
    Total                         39%       28%       11%        3%
                                 ----------------------------------

    Avg. crude call strike       $82       $67       $68       $91
    Avg crude collar cap           -        68         -         -
    Avg crude collar floor         -        60         -         -
    Avg. crude swap              $63       $69         -         -


September 2009 Quarter Highlights

During the September 2009 quarter, Delta continued to position itself as the world's No. 1 airline, with an ongoing commitment to employees, customers and communities. Highlights include:

  • Paying more than $50 million year-to-date in employee Shared Rewards for achieving operational performance goals;
  • Reaching a definitive agreement with US Airways to exchange slots and airport facilities at New York's LaGuardia and Washington's Reagan National airports, subject to regulatory approval, which will enable Delta to serve an additional two million customers at LaGuardia annually without added congestion;
  • Partnering with the City of Atlanta to reach an agreement to extend Delta's lease at Hartsfield-Jackson Atlanta International Airport through 2017 to maintain the airport's position as the leading airport in the world;
  • Enhancing BusinessElite service from New York by adding full-flat beds to all flights between New York-JFK and London-Heathrow and new BusinessElite service flights connecting New York-JFK to Los Angeles and San Francisco;
  • Announcing the 2010 SkyMiles Medallion program offering frequent flyers new, industry-leading benefits including a Diamond level status and rollover Medallion Qualification Miles; and
  • Launching the first joint Delta and Northwest Habitat for Humanity build in the U.S. with projects in Atlanta, Cincinnati, Detroit, Memphis, Minneapolis/St. Paul and New York and partnering - for the fifth consecutive year - with the Breast Cancer Research Foundation to add to the nearly $1.5 million previously raised through on-board pink product sales and donations.

Special Items

Delta recorded special charges totaling $212 million in the September 2009 quarter, including:

  • $83 million to write-off unamortized non-cash debt discount associated with the refinancing of certain Northwest debt;
  • $78 million in merger-related items; and
  • $51 million in charges for employee severance programs.

Delta recorded special charges totaling $24 million in the September 2008 quarter, including:

  • A $14 million charge for early termination fees under contract carrier arrangements;
  • $7 million in merger-related expenses; and
  • A $3 million net charge primarily for facilities restructuring and severance.

December 2009 Quarter Guidance

Delta's projections for the December 2009 quarter are below. This guidance is presented on a combined basis(6).

                                         4Q 2009 Forecast   2009 Forecast
                                         ----------------   -------------

    Fuel price, including taxes and
     hedges                                    $2.14            $2.14
    Operating margin                         Breakeven        Breakeven
    Capital expenditures                   $250 million     $1.4 billion
    Total liquidity as of Dec. 31, 2009    $5.0 billion


                                         4Q 2009 Forecast
                                          (compared to 4Q
                                               2008)        2009 vs. 2008
                                         ----------------   -------------

    Consolidated unit costs - excluding
    fuel expense                             Up 3 - 4%        Up 2 - 3%
    Mainline unit costs - excluding fuel
     expense                                 Up 3 - 4%        Up 2 - 3%

    System capacity                         Down 9 - 11%      Down 7 - 9%
         Domestic                           Down 5 - 7%       Down 7 - 9%
         International                      Down 14 - 16%     Down 7 - 9%

    Mainline capacity                       Down 9 - 11%      Down 7 - 9%
         Domestic                           Down 6 - 8%       Down 7 - 9%
         International                      Down 14 - 16%     Down 6 - 8%


Other Matters

Included with this press release are Delta's Consolidated Statements of Operations for the three and nine months ended Sept. 30, 2009 and 2008; a statistical summary for those periods; selected balance sheet data as of Sept. 30, 2009 and Dec. 31, 2008; and a reconciliation of certain non-GAAP financial measures.

About Delta

Delta Air Lines is the world's No. 1 airline. From its hubs in Atlanta, Cincinnati, Detroit, Memphis, Minneapolis-St. Paul, New York-JFK, Salt Lake City, Paris-Charles de Gaulle, Amsterdam and Tokyo-Narita, Delta, its Northwest subsidiary and Delta Connection carriers offer service to 355 destinations in 64 countries and serve more than 170 million passengers each year. Delta's marketing alliances allow customers to earn and redeem SkyMiles on more than 16,000 daily flights offered by SkyTeam and other partners. Delta's more than 70,000 employees worldwide are reshaping the aviation industry as the only U.S. airline to offer a full global network. Customers can check in for flights, print boarding passes, check bags and flight status at delta.com.

Endnotes

  1. Note A to the attached Consolidated Statements of Operations provides a reconciliation of non-GAAP financial measures used in this release and provides the reasons management uses those measures.
  2. Combined financial information includes the combined results of Delta and Northwest for the September 2008 quarter.
  3. Delta's financial results under generally accepted accounting principles (GAAP) include the results of Northwest Airlines for the periods following the completion of the merger, which occurred on Oct. 29, 2008. Unless otherwise indicated, Delta presents financial results on a GAAP basis which reflects both Delta and Northwest financial results for the September 2009 quarter, but only Delta standalone results for the September 2008 quarter. The company also presents financial and operating information on a "combined basis", which management believes is more meaningful for comparing year-over-year performance. The combined basis compares Delta's GAAP results for the September 2009 quarter to the combined results of Delta and Northwest for the September 2008 quarter.
  4. Delta excludes from mainline unit cost ancillary businesses not related to the generation of a seat mile, including Delta's providing maintenance and staffing services to third parties, dedicated freighter operations and Delta's vacation wholesale operations. Similarly, Delta excludes from passenger unit revenues, and includes in other revenue, revenues received for providing aircraft maintenance and staffing services to third parties, freighter operations and MLT. Management believes these classifications provide a more consistent and comparable reflection of Delta's mainline operations.
  5. Delta's September 2009 quarter average fuel price of $2.13 per gallon reflects the consolidated cost per gallon for mainline and regional operations, including contract carrier operations, net of fuel hedge impact.
  6. Year-over-year guidance comparisons assume the 2008 financial information for the applicable periods include Delta and Northwest results for the entire period, excluding special items and out-of-period fuel hedge losses.

Submission of Stockholder Proposals

To be considered for inclusion in the Delta proxy statement for the 2010 annual meeting, stockholder proposals must be submitted in writing and received no later than 5:00 p.m., local time, on Dec. 30, 2009 at the following address:

    Corporate Secretary
    Delta Air Lines, Inc.
    Dept. 981
    P.O. Box 20574
    Atlanta, Georgia 30320

This deadline supersedes the Nov. 9, 2009 deadline contained in Delta's proxy statement for the 2009 annual meeting.

Forward-looking Statements

Statements in this news release that are not historical facts, including statements regarding our estimates, expectations, beliefs, intentions, projections or strategies for the future, may be "forward-looking statements" as defined in the Private Securities Litigation Reform Act of 1995. All forward-looking statements involve a number of risks and uncertainties that could cause actual results to differ materially from the estimates, expectations, beliefs, intentions, projections and strategies reflected in or suggested by the forward-looking statements. These risks and uncertainties include, but are not limited to, the cost of aircraft fuel; the effects of the global recession; the effects of the global financial crisis; the impact of posting collateral in connection with our fuel hedge contracts; the impact that our indebtedness will have on our financial and operating activities and our ability to incur additional debt; the restrictions that financial covenants in our financing agreements will have on our financial and business operations; labor issues; the ability to realize the anticipated benefits of our merger with Northwest; the integration of the Delta and Northwest workforces; interruptions or disruptions in service at one of our hub airports; our increasing dependence on technology in its operations; our ability to retain management and key employees; the ability of our credit card processors to take significant holdbacks in certain circumstances; the effects of terrorist attacks; and competitive conditions in the airline industry.

Additional information concerning risks and uncertainties that could cause differences between actual results and forward-looking statements is contained in our Securities and Exchange Commission filings, including our Annual Report on Form 10-K for the fiscal year ended December 31, 2008 and our Quarterly Report on Form 10-Q for the period ended June 30, 2009. Caution should be taken not to place undue reliance on our forward-looking statements, which represent our views only as of October 22, 2009, and which we have no current intention to update.

                                DELTA AIR LINES, INC.
                         Consolidated Statements of Operations
                                    (Unaudited)

                              Three         Three
                              Months        Months
                              Ended         Ended
     (in millions, except    Sept. 30,     Sept. 30,   $ Change    % Change
      per share data)          2009         2008(1)       H(L)       H(L)
      -------------------      ----         ------        ---        ---
     OPERATING REVENUE:
       Passenger:
           Mainline           $5,122        $3,921       $1,201      31%
           Regional
            carriers           1,402         1,057          345      33%
                               -----         -----          ---
       Total passenger
        revenue                6,524         4,978        1,546      31%
       Cargo                     177           162           15       9%
       Other, net                873           579          294      51%
                                 ---           ---          ---
         Total operating
          revenue              7,574         5,719        1,855      32%
     OPERATING EXPENSE:
       Aircraft fuel and
        related taxes          1,973         1,952           21       1%
       Salaries and related
        costs                  1,894         1,086          808      74%
       Contract carrier
        arrangements (2)       1,009           941           68       7%
       Contracted services       415           272          143      53%
       Depreciation and
        amortization             385           293           92      31%
       Aircraft maintenance
        materials and
        outside repairs          334           273           61      22%
       Passenger
        commissions and
        other selling
        expenses                 384           259          125      48%
       Landing fees and
        other rents              340           179          161      90%
       Passenger service         181           122           59      48%
       Aircraft rent             123            70           53      76%
       Restructuring and
        merger-related
        items                    129            24          105      NM
       Other                     203           117           86      74%
                                 ---           ---           --
         Total operating
          expense              7,370         5,588        1,782      32%
                               -----         -----        -----
     OPERATING INCOME            204           131           73      56%
     OTHER (EXPENSE)
      INCOME:
       Interest expense         (319)         (140)        (179)     NM
       Interest income             4            21          (17)    -81%
       Loss on
        extinguishment of
        debt                     (83)            -          (83)     NM
       Miscellaneous, net         15           (62)          77      NM
                                  --           ---           --
         Total other expense,
          net                   (383)         (181)        (202)     NM
                                ----          ----         ----
     LOSS BEFORE INCOME
      TAXES                     (179)          (50)        (129)     NM
     INCOME TAX BENEFIT           18             -           18      NM
                                  --           ---           --
     NET LOSS                  $(161)         $(50)       $(111)     NM
                               =====          ====        =====
     BASIC AND DILUTED LOSS
      PER SHARE               $(0.19)       $(0.13)
                              ======        ======
     BASIC AND DILUTED
      WEIGHTED AVERAGE
      SHARES OUTSTANDING         828           396
                                 ===           ===

    (1) Pursuant to GAAP, results for the September 2008 quarter presented
        in this table reflect Delta standalone results only. See Note A for
        a representation of "Combined" results for the September 2008
        quarter, which includes Northwest results for that period.
    (2) Contract carrier arrangements expense includes $251 million and $368
        million for the three months ended September 30, 2009 and 2008,
        respectively, for aircraft fuel and related taxes.



                               DELTA AIR LINES, INC.
                        Consolidated Statements of Operations
                                  (Unaudited)

                              Nine         Nine
                             Months       Months
                             Ended        Ended
    (in millions, except    Sept. 30,    Sept. 30,    $ Change    % Change
     per share data)          2009        2008(1)       H(L)         H(L)
    --------------------      ----        ------        ---          ---
     OPERATING REVENUE:
       Passenger:
           Mainline         $14,053       $10,609      $3,444         32%
           Regional
            carriers          3,975         3,239         736         23%
                              -----         -----         ---
       Total passenger
        revenue              18,028        13,848       4,180         30%
       Cargo                    535           456          79         17%
       Other, net             2,695         1,680       1,015         60%
                              -----         -----       -----
         Total operating
          revenue            21,258        15,984       5,274         33%
     OPERATING EXPENSE:
       Aircraft fuel and
        related taxes         5,678         5,052         626         12%
       Salaries and
        related costs         5,652         3,269       2,383         73%
       Contract carrier
        arrangements (2)      2,882         2,836          46          2%
       Contracted services    1,249           783         466         60%
       Depreciation and
        amortization          1,152           892         260         29%
       Aircraft maintenance
        materials and
        outside repairs       1,150           836         314         38%
       Passenger commissions
        and other
        selling expenses      1,069           732         337        46%
       Landing fees and
        other rents             971           519         452        87%
       Passenger service        477           311         166        53%
       Aircraft rent            363           201         162        81%
       Impairment of
        goodwill and other
        intangible assets         -         7,296      (7,296)       NM
       Restructuring and
        merger-related
        items                   286           144         142        99%
       Other                    607           330         277        84%
                                ---           ---         ---
         Total operating
          expense            21,536        23,201      (1,665)       -7%
                             ------        ------      ------
     OPERATING LOSS            (278)       (7,217)      6,939       -96%
     OTHER (EXPENSE) INCOME:
       Interest expense        (951)         (428)       (523)       NM
       Interest income           23            73         (50)      -68%
       Loss on extinguishment
        of debt                 (83)            -         (83)       NM
       Miscellaneous, net        63           (31)         94        NM
                                 --           ---          --
         Total other expense,
          net                  (948)         (386)       (562)       NM
                               ----          ----        ----
     LOSS BEFORE INCOME
      TAXES                  (1,226)       (7,603)      6,377       -84%
     INCOME TAX BENEFIT          14           119        (105)      -88%
                                 --           ---        ----
     NET LOSS               $(1,212)      $(7,484)      6,272       -84%
                            =======       =======       =====
     BASIC AND DILUTED
      LOSS PER SHARE         $(1.47)      $(18.91)
                             ======       =======
     BASIC AND DILUTED
      WEIGHTED AVERAGE
      SHARES OUTSTANDING        826           396
                                ===           ===

    (1) Pursuant to GAAP, results for the nine months ended September 30,
        2008 presented in this table reflect Delta standalone results only.
    (2) Contract carrier arrangements expense includes $658 million and $1.1
        billion for the nine months ended September 30, 2009 and 2008,
        respectively, for aircraft fuel and related taxes.



                               DELTA AIR LINES, INC.
                           Selected Balance Sheet Data
                                  (In Millions)

                                                           Sept. 30, Dec. 31,
                                                             2009     2008
                                                             ----     ----
                                                         (Unaudited)

    Cash and cash equivalents                               $5,396   $4,255
    Short-term investments                                      92      212
    Restricted cash and cash equivalents (short-term
     and long-term)                                            499      453
    Total assets                                            44,853   45,084
    Total debt and capital leases, including current
     maturities                                             17,684   16,571
    Total stockholders' equity                                 900      874



                                  DELTA AIR LINES, INC.
                                   Statistical Summary
                                       (Unaudited)

                             Three Months Ended Sept. 30,
                             ---------------------------
                                               2008
                              2009          Combined(1)        Change
                              ----          ----------         ------
     Consolidated:
       Revenue Passenger
        Miles (millions)(2)  53,371           55,133            (3.2)%
       Available Seat Miles
        (millions)(2)        62,234           65,092            (4.4)%
       Passenger Mile
        Yield(2)              12.22 cents      15.11 cents     (19.1)%
       Passenger Revenue
        per Available Seat
        Mile (PRASM)(2)       10.48 cents      12.80 cents     (18.1)%
       Operating Cost Per
        Available Seat
        Mile (CASM)(2)        11.56 cents      14.30 cents     (19.2)%
          CASM excluding
           Special Items(2)
           - See Note A       11.35 cents      13.83 cents     (17.9)%
          CASM excluding
           Special Items
           and Fuel Expense
           and Related
          Taxes(2,3) -
           See Note A          7.82 cents       7.63 cents       2.5%
       Passenger Load
        Factor (2)             85.8 cents       84.7%            1.1 pts
       Fuel Gallons Consumed
        (millions)(2)         1,043            1,089            (4.2)%
       Average Price Per
        Fuel Gallon, net of
        hedging activity(2)   $2.13            $3.81           (44.1)%
       Number of Aircraft
        in Fleet, End of
        Period                1,001            1,020             (19) aircraft
       Full-Time Equivalent
        Employees, End of
        Period               81,740           85,507            (4.4)%

     Mainline:
       Revenue Passenger
        Miles (millions)     46,552           48,534            (4.1)%
       Available Seat Miles
        (millions)           53,772           56,755            (5.3)%
       Operating Cost Per
        Available Seat
        Mile (CASM)           10.54 cents      13.13 cents     (19.7)%
         CASM excluding
          Special Items
          - See Note A        10.31 cents      12.62 cents     (18.3)%
         CASM excluding
          Special Items
          and Fuel
          Expense and
          Related Taxes
          - See Note A         6.94 cents       6.81 cents       1.9%
       Fuel Gallons Consumed
        (millions)              845              898            (5.9)%
       Average Price Per Fuel
        Gallon, net of
        hedging activity      $2.18            $4.07           (46.4)%
       Number of Aircraft
        in Fleet, End of
        Period                  750              770             (20) aircraft


    (1) Data presented reflects operations for both Delta and Northwest for
        the September 2008 quarter.
    (2) Data presented includes operations under our contract carrier
        arrangements.
    (3) Excludes $251 million and $497 million, for the September 2009 and
        2008 quarters, respectively, for fuel expense incurred under contract
        carrier arrangements.



                            DELTA AIR LINES, INC.
                             Statistical Summary
                                 (Unaudited)

                              Nine Months Ended Sept. 30,
                              ---------------------------
                                              2008
                                 2009       Combined(1)       Change
                                 ----      -------------      ------
    Consolidated:
     Revenue Passenger Miles
      (millions)(2)           145,384       155,878            (6.7)%
     Available Seat Miles
      (millions)(2)           177,003       188,066            (5.9)%
     Passenger Mile
      Yield(2)                  12.40 cents   14.79 cents     (16.2)%
     Passenger Revenue per
      Available Seat Mile
      (PRASM)(2)                10.19 cents   12.26 cents     (16.9)%
     Operating Cost Per
      Available Seat Mile
      (CASM)(2)                 11.85 cents   19.85 cents     (40.3)%

         CASM excluding
          Special Items(2) -
          See Note A            11.69 cents   13.43 cents     (13.0)%
         CASM excluding
          Special Items and
          Fuel Expense and
          Related Taxes(2,3)
          - See Note A           8.16  cents   7.95 cents       2.6%
     Passenger Load Factor (2)   82.1%         82.9%          (0.8) pts
     Fuel Gallons Consumed
      (millions)(2)             2,951         3,182            (7.3)%
     Average Price Per Fuel
      Gallon, net of hedging
      activity(2)               $2.15         $3.34           (35.6)%
     Number of Aircraft in
      Fleet, End of Period      1,001         1,020             (19) aircraft
     Full-Time Equivalent
      Employees, End of
      Period                   81,740        85,507            (4.4)%

    Mainline:
     Revenue Passenger Miles
      (millions)              126,169       136,551            (7.6)%
     Available Seat Miles
      (millions)              152,141       163,254            (6.8)%
    Operating Cost Per
     Available Seat Mile
     (CASM)                     10.92 cents   19.53 cents     (44.1)%
         CASM excluding
          Special Items  -
          See Note A            10.74  cents  12.14 cents     (11.5)%
         CASM excluding
          Special Items and
          Fuel Expense and
          Related Taxes -
          See Note A             7.28  cents   7.08 cents       2.8%
     Fuel Gallons Consumed
      (millions)                2,378         2,604            (8.7)%
     Average Price Per
      Fuel Gallon,
      net of hedging
      activity                  $2.24         $3.32           (32.5)%
     Number of Aircraft
      in Fleet, End of
      Period                      750           770             (20) aircraft


    (1) Data presented reflects operations for both Delta and Northwest for
        the nine months ended Sept. 30, 2008.
    (2) Data presented includes operations under our contract carrier
        arrangements.
    (3) Excludes $658 million and $1.4 billion, for the nine months ended
        September 2009 and 2008, respectively, for fuel expense incurred under
        contract carrier arrangements

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

  • Delta completed its merger with Northwest Airlines on October 29, 2008. Accordingly, Delta's financial results under GAAP include the results of Northwest Airlines for the period January 1, 2009 through September 30, 2009.

Under GAAP, Delta does not include in its financial results the results of Northwest Airlines prior to the completion of the merger. Accordingly, Delta's financial results under GAAP for the September 2008 quarter do not include the results of Northwest Airlines for that period. This impacts the comparability of Delta's financial statements under GAAP for the September 2009 and 2008 quarters.

Delta presents its financial results for the September 2009 and September 2008 quarters under GAAP as well as on a "combined basis." "Combined basis" means the company combines the financial results of Delta and Northwest as if the merger had occurred prior to the beginning of the applicable period. Delta believes presenting this financial information on a combined basis provides a more meaningful basis for comparing Delta's year-over-year financial performance than the GAAP financial information.

This press release also includes guidance for the December 2009 quarter. Please note the year-over-year guidance comparisons assume the 2008 financial statements for the applicable periods were prepared on a combined basis, excluding special items and out-of-period fuel hedge losses. Delta is unable to reconcile certain forward-looking projections to GAAP, including projected consolidated cost per available seat mile (CASM) and Mainline non-fuel CASM, as the nature or amount of special items cannot be estimated at this time.

  • Delta excludes special items because management believes the exclusion of these items is helpful to investors to evaluate the company's recurring operational performance.

  • Delta excludes non-cash mark-to-market (MTM) adjustments related to fuel hedges settling in future periods in order to present financial results related to operations in the period shown.

  • Delta presents consolidated and Mainline CASM excluding fuel expense and related taxes because management believes the volatility in fuel prices impacts the comparability of year-over-year financial performance.

  • Consolidated and Mainline CASM excludes ancillary businesses not associated with the generation of a seat mile. These transactions include expenses related to Delta's providing maintenance and staffing services to third parties, dedicated freighter operations and Delta's vacation wholesale operations.

  • Delta presents net capital expenditures because management believes this metric is helpful to investors to evaluate the company's investing activities.

    DELTA AIR LINES, INC.
    Unaudited Combined Statements of Operations

                                      Three Months Ended Sept. 30, 2008
                                      ---------------------------------
                                                        Special
    (in millions)                Delta(1)  Northwest(1)  Items    Combined
                                 -------   -----------  -------   --------

     OPERATING REVENUE:
       Passenger:
        Mainline                    $3,921      $2,801       $-      $6,722
        Regional carriers            1,057         550        -       1,607
                                     -----         ---      ---       -----
       Total passenger revenue       4,978       3,351        -       8,329
       Cargo                           162         202        -         364
       Other, net                      579         260        -         839
                                       ---         ---      ---         ---
         Total operating revenue     5,719       3,813        -       9,532
     OPERATING EXPENSE:
       Aircraft fuel and related
        taxes                        1,952       1,946     (250) (2)  3,648
       Salaries and related
        costs                        1,086         706      (18) (3)  1,774
       Contract carrier
        arrangements                   941         275        -       1,216
       Aircraft maintenance
        materials and outside
        repairs                        273         168        -         441
       Contracted services             272         198        -         470
       Passenger commissions and
        other selling expenses         259         226        -         485
       Depreciation and
        amortization                   293         122        -         415
       Landing fees and other
        rents                          179         144        -         323
       Aircraft rent                    70          57        -         127
       Passenger service               122          65        -         187
       Restructuring and
        merger-related items            24           1      (25) (4)      -
       Other                           117         123      (10) (5)    230
                                       ---         ---      ---         ---
         Total operating expense     5,588       4,031     (303)      9,316
                                     -----       -----     ----       -----

     OPERATING INCOME (LOSS)           131        (218)     303         216
     OTHER (EXPENSE) INCOME:
       Interest expense               (140)       (112)       -        (252)
       Interest income                  21          21        -          42
       Miscellaneous, net              (62)         (5)       -         (67)
                                       ---         ---      ---         ---
         Total other expense, net     (181)        (96)       -        (277)
                                      ----         ---      ---        ----

     LOSS BEFORE INCOME TAXES          (50)       (314)     303         (61)
     INCOME TAX PROVISION                -          (3)       -          (3)
                                       ---         ---      ---         ---
     NET LOSS                         $(50)      $(317)    $303        $(64)
                                      ====       =====     ====        ====


    Notes:
    Combined Contract carrier arrangements expense includes $497 million for
    fuel expense incurred under these arrangements.

    (1)  We reclassified prior period amounts to conform to current
         presentations
    (2)  $250 million in out-of-period fuel hedges
    (3)  $18 million of merger-related expenses
    (4)  $14 million in contract carrier restructuring, $11 million in
         facilities and merger-related charges
    (5)  $10 million in merger-related charges



    DELTA AIR LINES, INC.
    Unaudited Combined Statements of Operations

                              Three       Oct. 1,
                              Months       2008
                              Ended      through       Three Months
                             Dec. 31,    Oct. 31,         Ended
                               2008        2008        Dec. 31, 2008
                             --------    --------    -----------------
                                                    Special
     (in millions)            Delta(1)  Northwest(1)  Items    Combined
    ------------             --------  ------------ -------   --------

     OPERATING REVENUE:
       Passenger:
        Mainline                $4,528        $741       $-       $5,269
        Regional carriers        1,207         181        -        1,388
                                 -----         ---      ---        -----
       Total passenger
        revenue                  5,735         922        -        6,657
       Cargo                       230          55        -          285
       Other, net                  748          78        -          826
                                   ---         ---      ---          ---
         Total operating
          revenue                6,713       1,055        -        7,768
     OPERATING EXPENSE:
       Aircraft fuel and
        related taxes            2,294         750     (301) (2)   2,743
       Salaries and related
        costs                    1,533         245      (25) (3)   1,753
       Contract carrier
        arrangements               930          81        -        1,011
       Aircraft maintenance
        materials and outside
        repairs                    333          49        -          382
       Contracted services         370          65        -          435
       Passenger commissions
        and other selling
        expenses                   298          72        -          370
       Depreciation and
        amortization               374          39        -          413
       Landing fees and other
        rents                      268          40        -          308
       Aircraft rent               106          17        -          123
       Passenger service           129          20        -          149
       Restructuring and
        merger-related items       987         224   (1,211) (4)       -
       Other                       188          39        -          227
                                   ---         ---      ---          ---
         Total operating
          expense                7,810       1,641   (1,537)       7,914
                                 -----       -----   ------        -----

     OPERATING (LOSS) INCOME    (1,097)       (586)   1,537         (146)
     OTHER (EXPENSE) INCOME:
       Interest expense           (277)        (39)       -         (316)
       Interest income              19           5        -           24
       Miscellaneous, net          (83)         (9)      20 (5)      (72)
                                   ---         ---      ---          ---
         Total other expense,
          net                     (341)        (43)      20         (364)
                                  ----         ---      ---         ----

     LOSS BEFORE INCOME TAXES   (1,438)       (629)   1,557         (510)
     INCOME TAX PROVISION            -           -        -            -
                                   ---         ---      ---          ---
     NET LOSS                  $(1,438)       (629)  $1,557        $(510)
                               =======        ====   ======        =====

    Notes:
    Combined Contract carrier arrangements expense includes $301 million for
    fuel expense incurred under these arrangements.

    (1)  We reclassified prior period amounts to conform to current
    presentations
    (2)  $301 million in out-of-period fuel hedges
    (3)  $25 million of merger-related expenses
    (4)  $1.2 billion in merger-related charges and $18 million in facilities
    restructuring
    (5)  $20 million write-down in value of auction rate securities

                                                  Three Months
                                                      Ended
                                                 Sept. 30, 2009
                                                 --------------
     (in millions)
     Net loss                                              $(161)
     Items excluded:
     Restructuring and merger-related items                  129
     Loss on extinguishment of debt                           83
                                                             ---
     Net income excluding special items                      $51
                                                             ===
     Weighted average shares outstanding                     828
                                                             ---
     Income per share excluding special items              $0.06
                                                           =====



                                       GAAP         Combined       GAAP
                                    Three Months  Three Months  Three Months
                                      Ended         Ended         Ended
                                     Sept. 30      Sept. 30,     Sept. 30,
    (in millions)                      2009          2008          2008
                                     ---------     ---------    ---------
     Operating Expense                  $7,370        $9,619       $5,588
     Items excluded:
     MTM adjustments to fuel
      hedges settling in future
      periods                                -          (250)           -
     Restructuring and
      merger-related items                (129)          (53)         (24)
                                          ----           ---          ---
     Operating expense excluding
       special items                    $7,241        $9,316       $5,564
                                        ======        ======       ======



                                                       GAAP
                                                   Three Months
                                                       Ended
     (in millions)                                Sept. 30, 2009
                                                  --------------
     Non-operating expense                                $383
     Items excluded:
     Loss on extinguishment of debt                        (83)
                                                           ---
     Non-operating expense excluding special items        $300
                                                          ====




                                                  Three Months
                                                      Ended
     (in millions)                               Sept. 30, 2009
                                                 --------------
     Property and equipment additions (GAAP)            $(121)
     Adjustments:
     Aircraft purchases under seller financing            (25)
                                                          ---
     Total capital expenditures                         $(146)
                                                        =====



                                                  Three Months
                                                      Ended
     (in millions)                               Sept. 30, 2009
                                                 --------------
     Property and equipment additions, flight
      equipment (GAAP)                                   $(49)
     Adjustments:
     Aircraft purchases under seller financing            (25)
                                                          ---
     Total investments in aircraft, parts and
      modifications                                      $(74)
                                                         ====



    (in millions,          Three Months Ended
    except unit                Sept. 30, 2008          Passenger
    data)                Delta  Northwest  Combined   Mile Yield  PRASM
     Passenger and
      operating revenue
     Domestic           $2,058   $1,555    $3,613    13.91 cents  12.14 cents
     Atlantic            1,402      534     1,936    13.87        11.59
     Latin
      America              365       13       378    14.00        11.29
     Pacific                96      699       795    13.50        11.46
                           ---      ---       ---
     Total
      mainline           3,921    2,801     6,722    13.85        11.84
         Regional
          carriers       1,057      550     1,607    24.35        19.27
                         -----      ---     -----
     Total
      passenger
      revenue            4,978    3,351     8,329    15.11        12.80
     Cargo                 162      202       364
     Other, net            579      260       839
                           ---      ---       ---
       Total
        operating
        revenue         $5,719   $3,813    $9,532
                        ======   ======    ======


    (in millions,            Nine Months Ended
     except unit               Sept. 30, 2008         Passenger
     data)               Delta  Northwest  Combined   Mile Yield   PRASM

    Passenger revenue  $13,848   $9,203    $23,051   14.79 cents  12.26 cents



                                Three Months Ended Sept. 30,

                          2009             2008              2008
                          GAAP           Combined            GAAP
                          ----           --------            ----
     (in millions,
      except per
      cent data)
     CASM                 11.84  cents      14.78  cents     13.84  cents
     Ancillary
      businesses          (0.28)            (0.48)           (0.37)
                          -----             -----            -----
     CASM excluding
      items not
      related to
      generation
      of a seat mile      11.56 cents       14.30 cents      13.47 cents
     Items excluded:
     Restructuring
      and merger-related
      items               (0.21)            (0.08)           (0.06)
     MTM adjustments
      to fuel hedges
      settling in
      future periods          -             (0.39)               -
                            ---             -----              ---
     CASM excluding
      special items       11.35 cents       13.83 cents      13.41 cents
     Fuel expense
      and related
      taxes               (3.53)            (6.20)           (5.75)
                          -----             -----            -----
     CASM excluding
      fuel expense
      and related
      taxes and
      special items        7.82 cents        7.63 cents       7.66 cents
                           ====              ====             ====
     ASMs                62,234            65,092           40,371
                         ======            ======           ======



                                    Three Months Ended Sept. 30,
                                    ---------------------------
                                2009             2008          2008
                                ----             ----          ----
                                GAAP           Combined        GAAP
                                ----           --------        ----
    (in millions, except per
     cent data)

    Consolidated operating
     expense                  $7,370           $9,619          $5,588
    Less regional carriers
     operating expense        (1,527)          (1,854)         (1,312)
                              ------           ------         -------
    Mainline operating
     expense                  $5,843           $7,765          $4,276
                              ======           ======          ======
    Mainline CASM              10.87 cents      13.68 cents     12.26 cents
    Ancillary businesses       (0.33)           (0.55)          (0.44)
                               -----            -----           -----
    Mainline CASM
     excluding items not
     related to generation
     of a seat mile            10.54 cents      13.13 cents      11.82 cents
    Items excluded:
    Impairment of goodwill
     and other assets              -                -               -
    Restructuring and
     merger-related items      (0.23)           (0.07)          (0.02)
    MTM adjustments to fuel
     hedges settling in
     future periods                -            (0.44)              -
                                 ---            -----             ---
    Mainline CASM
     excluding special
     items                     10.31 cents      12.62 cents     11.80 cents
    Fuel expense
     and related
     taxes                     (3.37)           (5.81)           (5.22)
                               -----            -----            -----
    Mainline CASM
     excluding fuel
     expense and related
     taxes and special
     items                      6.94 cents       6.81 cents       6.58 cents
                                ====             ====             ====
    ASMs                      53,772           56,755           34,874
                              ======           ======           ======


                                             Nine Months Ended Sept. 30,
                                             ---------------------------

                                               2009           2008
                                               ----           ----
                                               GAAP        Combined
                                               ----        --------
     (in millions, except per cent data)
     CASM                                     12.17  cents   20.37  cents
     Ancillary businesses                     (0.32)         (0.52)
                                              -----          -----
     CASM excluding items not related
      to generation of a seat mile            11.85  cents   19.85  cents
     Items excluded:
     Impairment of goodwill and other
      assets                                      -          (6.26)
     Restructuring and merger-related items   (0.16)         (0.11)
     MTM adjustments to fuel hedges
      settling in future periods                  -          (0.05)
                                                  -          -----
     CASM excluding special items             11.69  cents   13.43  cents
     Fuel expense and related taxes           (3.53)         (5.48)
                                              -----          -----
     CASM excluding fuel expense
      and related taxes and special items      8.16  cents    7.95  cents
                                               ====           ====
     ASMs                                   177,003        188,066
                                            =======        =======



                                              Nine Months Ended Sept. 30,
                                              ---------------------------
                                                  2009          2008
                                                  ----          ----
                                                  GAAP        Combined
                                                  ----        --------
     (in millions, except per cent data)
     Consolidated operating expense            $21,536        $38,307
     Less regional carriers operating expense   (4,347)        (5,442)
                                                ------         ------
     Mainline operating expense                $17,189        $32,865
                                               =======        =======
     Mainline CASM                               11.30  cents   20.13  cents
     Ancillary businesses                        (0.38)         (0.60)
                                                 -----          -----
     Mainline CASM excluding items not
      related to generation of a seat mile       10.92  cents   19.53  cents
     Items excluded:
     Impairment of goodwill and other
      assets                                         -          (7.21)
     Restructuring and merger-related
      items                                      (0.18)         (0.12)
     MTM adjustments to fuel hedges
      settling in future periods                     -          (0.06)
                                                     -          -----
     Mainline CASM excluding special items       10.74  cents   12.14  cents
     Fuel expense and related taxes              (3.46)         (5.06)
                                                 -----          -----
     Mainline CASM excluding fuel expense
      and related taxes and special items         7.28  cents    7.08  cents
                                                  ====           ====
     ASMs                                      152,141        163,254
                                               =======        =======


SOURCE Delta Air Lines

Photo: http://www.newscom.com/cgi-bin/prnh/20090202/DELTALOGO

SOURCE: Delta Air Lines

Web site: http://www.delta.com/

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