DELTA AIR LINES INC

Previous wording

Our operating income for the June 2024 quarter was $2.3 billion, a decrease of $224 million compared to the June 2023 quarter.

Current wording

Our operating income for the September 2024 quarter was $1.4 billion, a decrease of $587 million compared to the September 2023 quarter.

Previous wording

Revenue. Compared to the June 2023 quarter, our total revenue increased $1.1 billion, or 7%, due primarily to an 8% increase in capacity on strong operational performance. Passenger revenue increased 5% resulting from strength in travel demand, particularly for our premium products, partially offset by a decrease in yield. Total revenue, adjusted (a non-GAAP financial measure, which excludes revenue related to refinery sales to third parties) increased in the June 2024 quarter by $794 million, or 5.4%, compared to the June 2023 quarter.

Current wording

Revenue. Compared to the September 2023 quarter, our total revenue increased $189 million, or 1%, due to increased revenue related to refinery sales to third parties and a 4% increase in capacity. Passenger revenue was comparable to the September 2023 quarter on an increase in revenue for premium products and loyalty travel awards, offset by a decrease in main cabin ticket revenue. Total revenue, adjusted (a non-GAAP financial measure, which excludes revenue related to refinery sales to third parties) increased in the September 2024 quarter by $41 million compared to the September 2023 quarter.

Previous wording

Operating Expense. Total operating expense in the June 2024 quarter increased $1.3 billion, or 10%, compared to the June 2023 quarter, primarily due to higher employee costs from increased wages, higher fuel expense and increased costs associated with higher capacity. Total operating expense, adjusted (a non-GAAP financial measure, which primarily excludes expenses related to refinery sales to third parties) in the June 2024 quarter increased $1.0 billion, or 8%, compared to the June 2023 quarter.

Current wording

Operating Expense. Total operating expense in the September 2024 quarter increased $776 million, or 6%, compared to the September 2023 quarter, primarily due to costs associated with the 4% increase in capacity, higher employee costs from increased wages, increased landing fees and other rents and costs associated with the CrowdStrike-caused outage. The outage and operational recovery resulted in approximately $170 million of additional operating expenses primarily due to customer expense reimbursements and crew-related costs. Fuel expense was approximately $50 million lower than it would have been as a result of the 7,000 flight cancellations over the five-day period. Total operating expense, adjusted (a non-GAAP financial measure, which primarily excludes expenses related to refinery sales to third parties) in the September 2024 quarter increased $631 million, or 5%, compared to the September 2023 quarter.

Previous wording

Our total operating cost per available seat mile ("CASM") increased 2% compared to the June 2023 quarter. Non-fuel unit cost ("CASM-Ex", a non-GAAP financial measure) increased 0.6%, primarily due to higher employee costs from increased wages.

Current wording

Our total operating cost per available seat mile ("CASM") increased 2% compared to the September 2023 quarter, primarily for the same reasons as the increase in total operating expense. Non-fuel unit cost ("CASM-Ex", a non-GAAP financial measure) increased 5.7%.

Previous wording

Cash Flow. Our cash, cash equivalents, short-term investments and aggregate undrawn principal amount available under our revolving credit facilities ("liquidity") as of June 30, 2024 was $7.2 billion.

Current wording

Cash Flow. Our cash, cash equivalents, short-term investments and aggregate undrawn principal amount available under our revolving credit facilities ("liquidity") as of September 30, 2024 was $6.9 billion.

Previous wording

During the June 2024 quarter, operating activities generated $2.5 billion, primarily from ticket sales. Total cash sales to American Express were $1.9 billion in the June 2024 quarter, an increase of approximately 9% compared to the June 2023 quarter.

Current wording

During the September 2024 quarter, operating activities generated $1.3 billion, primarily from ticket sales. Total cash sales to American Express were $1.8 billion in the September 2024 quarter, an increase of approximately 6% compared to the September 2023 quarter.

Previous wording

Cash flows used in investing activities during the quarter totaled $809 million as capital expenditures were partially offset by redemptions of short-term investments. These operating and investing activities yielded free cash flow (a non-GAAP financial measure) of $1.3 billion in the June 2024 quarter. Additionally, we had cash outflows of $1.4 billion related to repayments of our debt and finance leases.

Current wording

Cash flows used in investing activities during the quarter totaled $1.1 billion primarily from capital expenditures. These operating and investing activities yielded free cash flow (a non-GAAP financial measure) of $95 million in the September 2024 quarter. Additionally, we had cash outflows of $263 million related to repayments of our debt and finance leases.

Previous wording

Compared to the June 2023 quarter, total revenue increased $1.1 billion, or 7%, due primarily to an 8% increase in capacity resulting from strength in travel demand, particularly for our premium products, and strong operational performance, partially offset by a decrease in yield for main cabin.

Current wording

Compared to the September 2023 quarter, total revenue increased $189 million, or 1%, due to increased revenue related to refinery sales to third parties, loyalty travel awards and a 4% increase in capacity resulting from strength in travel demand, particularly for our premium products, partially offset by a decrease in main cabin ticket revenue.

Previous wording

Domestic passenger revenue increased 5% in the June 2024 quarter compared to the June 2023 quarter on an 8% increase in capacity and a stable load factor. We experienced strong revenue results across the domestic network, with coastal hub markets such as New York and Boston improving significantly compared to the prior year period.

Current wording

Domestic passenger revenue was consistent between the September 2024 quarter and the September 2023 quarter on a 3% increase in capacity and a slight decrease in load factor. We experienced strong revenue results across the domestic network, with premium revenue growing more than main cabin revenue compared to the prior year period.

Previous wording

Refinery. Refinery sales to third parties increased $286 million compared to the June 2023 quarter. See "Refinery Segment" below for additional details on the refinery's operations, including third party refinery sales.

Current wording

Refinery. Refinery sales to third parties increased $148 million compared to the September 2023 quarter. See "Refinery Segment" below for additional details on the refinery's operations, including third party refinery sales.

Previous wording

Loyalty Program. This relates to revenues from brand usage by third parties and other performance obligations embedded in miles sold, as well as redemption of miles for non-air travel and other awards. These revenues are mainly driven by customer spend on American Express cards and new cardholder acquisitions. Revenues from our relationship with American Express increased compared to the June 2023 quarter due to increased co-brand card spend and more premium card account acquisitions.

Current wording

Loyalty Program. This relates to revenues from brand usage by third parties and other performance obligations embedded in miles sold, as well as redemption of miles for non-air travel and other awards. These revenues are mainly driven by customer spend on American Express cards and new cardholder acquisitions. Revenues from our relationship with American Express increased compared to the September 2023 quarter due to increased co-brand card spend and card account acquisitions.

Previous wording

Miscellaneous. This is primarily composed of revenues related to lounge access, including access provided to certain American Express cardholders, codeshare agreements and certain other commercial relationships. The increase in revenues compared to the June 2023 quarter was primarily driven by codeshare and other commercial relationships.

Current wording

Miscellaneous. This is primarily composed of revenues related to lounge access, including access provided to certain American Express cardholders, codeshare agreements and certain other commercial relationships. The increase in revenues compared to the September 2023 quarter was primarily driven by codeshare agreements and other commercial relationships.

Previous wording

Salaries and Related Costs. The increase in salaries and related costs primarily resulted from the implementation of base pay increases for eligible employees of 5% effective June 1, 2024 and for Delta pilots on January 1, 2024. In June 2024 we also increased the minimum starting wage to $19 per hour.

Current wording

Salaries and Related Costs. The increase in salaries and related costs primarily resulted from the implementation of base pay increases for eligible employees of 5% effective June 1, 2024 and for Delta pilots on January 1, 2024. In June 2024 we also increased our minimum starting wage for domestic mainline employees to $19 per hour. Salaries and related costs also increased due to additional crew-related costs resulting from the CrowdStrike-caused outage.

Previous wording

Aircraft Fuel and Related Taxes. Aircraft fuel and related taxes increased $297 million compared to the June 2023 quarter primarily due to a 5% increase in the market price of jet fuel and a 7% increase in consumption on an 8% increase in capacity. We continue to expect that fuel consumption throughout 2024 will increase compared to 2023 aligned with capacity, partially offset by increases in the fuel efficiency of our fleet. The refinery also provided a benefit of six cents per gallon compared to a benefit of four cents per gallon in the June 2023 quarter. We expect jet fuel prices to remain volatile.

Current wording

Aircraft Fuel and Related Taxes. Aircraft fuel and related taxes decreased $189 million compared to the September 2023 quarter primarily due to a 13% decrease in the market price of jet fuel offset by a 3% increase in consumption on a 4% increase in capacity. Fuel expense was also approximately $50 million lower than it would have been as a result of the 7,000 flight cancellations over the five-day period following the CrowdStrike-caused outage. We continue to expect that fuel consumption for the remainder of 2024 will increase compared to 2023 aligned with capacity, partially offset by increases in the fuel efficiency of our fleet. The refinery generated an operating loss resulting in incremental cost of three cents per gallon compared to a benefit of 11 cents per gallon in the September 2023 quarter. We expect jet fuel prices to remain volatile throughout the remainder of 2024 and into 2025.

Previous wording

Ancillary Businesses and Refinery. Ancillary businesses and refinery includes expenses associated with refinery sales to third parties, aircraft maintenance services we provide to third parties and our vacation wholesale operations. Refinery sales to third parties increased $286 million compared to the June 2023 quarter. See "Refinery Segment" below for additional details on the refinery's operations, including third party refinery sales.

Current wording

Ancillary Businesses and Refinery. Ancillary businesses and refinery includes expenses associated with refinery sales to third parties, aircraft maintenance services we provide to third parties and our vacation wholesale operations. Refinery sales to third parties increased $148 million compared to the September 2023 quarter. See "Refinery Segment" below for additional details on the refinery's operations, including third party refinery sales.

Previous wording

Other. The increase in other is primarily due to higher volume-related expenses associated with increased capacity, such as flight crew and other employee travel and incidental costs, and inflationary pressures.

Current wording

Other. The increase in other is primarily due to the impact of service recovery costs including customer expense reimbursements from the CrowdStrike-caused outage and higher volume-related expenses associated with increased capacity, such as flight crew and other employee travel and incidental costs.

Previous wording

Unless otherwise discussed below, the changes in total revenue line items, as well as the underlying reasons for these changes, compared to the six months ended June 30, 2023 are consistent with the discussion above under Results of Operations - Three Months Ended June 30, 2024 and 2023.

Current wording

Unless otherwise discussed below, the changes in total revenue line items, as well as the underlying reasons for these changes, compared to the nine months ended September 30, 2023 are consistent with the discussion above under Results of Operations - Three Months Ended September 30, 2024 and 2023.

Previous wording

Compared to the six months ended June 30, 2023, total revenue increased $2.1 billion, or 7%, due primarily to an 8% increase in capacity resulting from strength in travel demand, particularly for our premium products, and strong operational performance, partially offset by a decrease in yield for main cabin.

Current wording

Compared to the nine months ended September 30, 2023, total revenue increased $2.3 billion, or 5%, due primarily to a 6% increase in capacity resulting from strength in travel demand, particularly for our premium products and increased revenue related to refinery sales to third parties, partially offset by a decrease in main cabin ticket revenue.

Previous wording

Domestic passenger unit revenue for the six months ended June 30, 2024 increased on strong demand and higher capacity compared to the six months ended June 30, 2023. International passenger revenue for the six months ended June 30, 2024 increased 7% on 12% higher capacity compared to the six months ended June 30, 2023 due to strong demand for international travel, particularly to leisure destinations. The Pacific and Latin America regions accounted for the majority of international capacity growth on continued network restoration.

Current wording

Domestic passenger revenue for the nine months ended September 30, 2024 increased on higher capacity compared to the nine months ended September 30, 2023. International passenger revenue for the nine months ended September 30, 2024 increased 4% on 10% higher capacity compared to the nine months ended September 30, 2023 due to strong demand for international travel, particularly to leisure destinations. The Pacific and Latin America regions accounted for the majority of international capacity growth on continued network restoration in the Pacific and the continued maturation of our joint venture with LATAM in South America.

Previous wording

Unless otherwise discussed below, the changes in operating expense line items, as well as the underlying reasons for these changes, compared to the six months ended June 30, 2023 are consistent with the discussion above under Results of Operations - Three Months Ended June 30, 2024 and 2023.

Current wording

Unless otherwise discussed below, the changes in operating expense line items, as well as the underlying reasons for these changes, compared to the nine months ended September 30, 2023 are consistent with the discussion above under Results of Operations - Three Months Ended September 30, 2024 and 2023.

Previous wording

Aircraft Fuel and Related Taxes. Aircraft fuel and related taxes increased $218 million compared to the six months ended June 30, 2023 due to a 6% increase in consumption on an 8% increase in capacity partially offset by a 5% decrease in the market price per gallon of jet fuel. The refinery also provided a benefit of five cents per gallon compared to a benefit of 14 cents per gallon in the six months ended June 30, 2023.

Current wording

Aircraft Fuel and Related Taxes. Aircraft fuel and related taxes increased $29 million compared to the nine months ended September 30, 2023 due to a 5% increase in consumption on a 6% increase in capacity partially offset by an 8% decrease in the market price per gallon of jet fuel. The refinery also provided a benefit of two cents per gallon compared to a benefit of 13 cents per gallon in the nine months ended September 30, 2023.

Previous wording

Interest expense, net. Interest expense, net includes interest expense and interest income. This decreased compared to the prior year primarily due to reduced interest expense resulting from our debt reduction initiatives. During 2023, we made payments of approximately $4.1 billion related to our debt and finance lease obligations. We have continued to pay down our debt during the six months ended June 30, 2024 with $2.1 billion of payments on debt and finance lease obligations, including approximately $900 million of early repayments. This included early extinguishment of $744 million in principal related to a portion of the SkyMiles Term Loan and various secured and unsecured notes, and approximately $150 million on finance leases that were scheduled to be paid later in 2024. We continue to seek opportunities to pre-pay our debt, in addition to periodic amortization and scheduled maturities.

Current wording

Interest expense, net. Interest expense, net includes interest expense and interest income. This decreased compared to the prior year primarily due to reduced interest expense resulting from our debt reduction initiatives. During 2023, we made payments of approximately $4.1 billion related to our debt and finance lease obligations. We have continued to pay down our debt during the nine months ended September 30, 2024 with $2.4 billion of payments on debt and finance lease obligations, including approximately $900 million of early repayments. This included early extinguishment of $744 million in principal related to a portion of the SkyMiles Term Loan and various secured and unsecured notes, and approximately $150 million on finance leases that were scheduled to be paid later in 2024. We continue to seek opportunities to pre-pay our debt, in addition to periodic amortization and scheduled maturities.

Previous wording

The refinery operated by Monroe primarily produces gasoline, diesel and jet fuel. Monroe exchanges non-jet fuel products the refinery produces with third parties for jet fuel consumed in our airline operations. The jet fuel produced and procured through exchanging gasoline and diesel fuel produced by the refinery typically provides approximately 200,000 barrels per day, or approximately 75% of our consumption, for use in our airline operations. The refinery regularly optimizes its sales and exchange activities based on market conditions. The refinery generated lower operating income in the six months ended June 30, 2024 compared to the six months ended June 30, 2023, primarily as a result of lower pricing in the first half of 2024.

Current wording

The refinery operated by Monroe primarily produces gasoline, diesel and jet fuel. Monroe exchanges non-jet fuel products the refinery produces with third parties for jet fuel consumed in our airline operations. The jet fuel produced and procured through exchanging gasoline and diesel fuel produced by the refinery typically provides approximately 200,000 barrels per day, or approximately 75% of our consumption, for use in our airline operations. The refinery regularly optimizes its sales and exchange activities based on market conditions. The refinery generated lower operating income in the nine months ended September 30, 2024 compared to operating income in the nine months ended September 30, 2023, primarily as a result of lower pricing.

Previous wording

(1)We own 192 and have operating leases for three of these regional aircraft. The remainder are owned or leased by SkyWest Airlines, Inc. or Republic Airways, Inc.

Current wording

(1)We own 194 and have operating leases for two of these regional aircraft. The remainder are owned or leased by SkyWest Airlines, Inc. or Republic Airways, Inc.

Previous wording

(2)Excluded from the total operating count above are nine CRJ-700 and three CRJ-900 aircraft which are owned and temporarily parked as of June 30, 2024.

Current wording

(2)Excluded from the total operating count above are nine CRJ-700 and two CRJ-900 aircraft which are owned and temporarily parked as of September 30, 2024.

Previous wording

As of June 30, 2024, we had $7.2 billion in cash, cash equivalents, short-term investments and aggregate undrawn principal amount available under our revolving credit facilities ("liquidity"). We expect to meet our liquidity needs for the next twelve months with cash and cash equivalents, short-term investments and cash flows from operations. We expect to meet our long-term liquidity needs with cash flows from operations and financing arrangements.

Current wording

As of September 30, 2024, we had $6.9 billion in cash, cash equivalents, short-term investments and aggregate undrawn principal amount available under our revolving credit facilities. We expect to meet our liquidity needs for the next twelve months with cash and cash equivalents and cash flows from operations. We expect to meet our long-term liquidity needs with cash flows from operations and financing arrangements.

Previous wording

We generated cash flows from operations of $4.9 billion and $4.8 billion in the six months ended June 30, 2024 and 2023, respectively. We expect to continue generating positive cash flows from operations during the remainder of 2024.

Current wording

We generated cash flows from operations of $6.1 billion and $5.9 billion in the nine months ended September 30, 2024 and 2023, respectively. We expect to continue generating positive cash flows from operations during the remainder of 2024.

Previous wording

Fuel. Fuel expense represented approximately 20% of our total operating expense for the six months ended June 30, 2024 and 2023. The market price for jet fuel is volatile, which can impact the comparability of our periodic cash flows from operations. For example, the market price for jet fuel was 5% higher in the June 2024 quarter compared to the June 2023 quarter after it was 15% lower in the March 2024 quarter compared to the March 2023 quarter. Fuel consumption was higher during the three and six months ended June 30, 2024 compared to the prior year period due to the increase in capacity. We continue to expect that fuel consumption throughout 2024 will increase compared to 2023 aligned with capacity, partially offset by increases in the fuel efficiency of our fleet.

Current wording

Fuel. Fuel expense represented approximately 20% and 21% of our total operating expense for the nine months ended September 30, 2024 and 2023, respectively. The market price for jet fuel is volatile, which can impact the comparability of our periodic cash flows from operations. For example, the market price for jet fuel was 13% lower in the September 2024 quarter compared to the September 2023 quarter after it was 5% higher in the June 2024 quarter compared to the June 2023 quarter. Fuel consumption was higher during the three and nine months ended September 30, 2024 compared to the prior year periods due to the increase in capacity. We continue to expect that fuel consumption for the remainder of 2024 will increase compared to 2023 aligned with capacity, partially offset by increases in the fuel efficiency of our fleet.

Previous wording

Our broad-based employee profit sharing program provides that for each year in which we have an annual pre-tax profit, as defined by the terms of the program, we will pay a specified portion of that profit to eligible employees. In determining the amount of profit sharing, the program defines profit as pre-tax profit adjusted for profit sharing and certain other items. During the six months ended June 30, 2024, we accrued $644 million in profit sharing expense based on the year-to-date performance and current expectations for 2024 profit.

Current wording

Our broad-based employee profit sharing program provides that for each year in which we have an annual pre-tax profit, as defined by the terms of the program, we will pay a specified portion of that profit to eligible employees. In determining the amount of profit sharing, the program defines profit as pre-tax profit adjusted for profit sharing and certain other items. During the nine months ended September 30, 2024, we accrued $964 million in profit sharing expense based on the year-to-date performance and current expectations for 2024 profit.

Previous wording

Sale of Miles to Participating Companies. Customers earn miles based on their spending with participating companies such as credit card, retail, ridesharing, car rental and hotel companies with which we have marketing agreements to sell miles. Payments are typically due to us monthly based on the volume of miles sold during the period. Our most significant contract to sell miles relates to our co-brand credit card relationship with American Express. Total cash sales to American Express were $3.6 billion in the six months ended June 30, 2024, an increase of 7% compared to the prior year period. See Note 2 of the Notes to the Condensed Consolidated Financial Statements for further information regarding the cash sales from marketing agreements.

Current wording

Sale of Miles to Participating Companies. Customers earn miles based on their spending with participating companies such as credit card, retail, ridesharing, car rental and hotel companies with which we have marketing agreements to sell miles. Payments are typically due to us monthly based on the volume of miles sold during the period. Our most significant contract to sell miles relates to our co-brand credit card relationship with American Express. Total cash sales to American Express were $5.4 billion in the nine months ended September 30, 2024, an increase of 6% compared to the prior year period. See Note 2 of the Notes to the Condensed Consolidated Financial Statements for further information regarding the cash sales from marketing agreements.

Previous wording

Short-Term Investments. During the six months ended June 30, 2024, we redeemed a net of $1.0 billion in short-term investments. See Note 3 of the Notes to the Condensed Consolidated Financial Statements for further information on these investments.

Current wording

Short-Term Investments. During the nine months ended September 30, 2024, we redeemed a net of $1.1 billion in short-term investments. See Note 3 of the Notes to the Condensed Consolidated Financial Statements for further information on these investments.

Previous wording

Capital Expenditures. Our capital expenditures were $2.5 billion for each of the six months ended June 30, 2024 and 2023. We have committed to future aircraft purchases and have obtained, but are under no obligation to use, long-term financing commitments for a substantial portion of the purchase price of the aircraft. Our expected 2024 capital spend of approximately $5.0 billion, excluding the New York-LaGuardia airport project discussed below, will be primarily for aircraft, including deliveries and advance deposit payments, as well as fleet modifications and technology enhancements and may vary depending on financing decisions.

Current wording

Capital Expenditures. Our capital expenditures were $3.8 billion and $3.7 billion for the nine months ended September 30, 2024 and 2023, respectively. We have committed to future aircraft purchases and have obtained, but are under no obligation to use, long-term financing commitments for a substantial portion of the purchase price of the aircraft. Our expected 2024 capital spend of approximately $5.0 billion, excluding the New York-LaGuardia airport project discussed below, will be primarily for aircraft, including deliveries and advance deposit payments, as well as fleet modifications and technology enhancements.

Previous wording

Using funding primarily provided by existing financing arrangements and other sources of funding, we expect to spend approximately $400 million on this project during 2024, of which $163 million was incurred in the six months ended June 30, 2024.

Current wording

Using funding primarily provided by existing financing arrangements and other sources of funding, we expect to spend approximately $350 million on this project during 2024, of which $237 million was incurred in the nine months ended September 30, 2024.

Previous wording

Debt and Finance Leases. In the six months ended June 30, 2024, we had cash outflows of $2.1 billion related to repayments of our debt and finance lease obligations, including approximately $900 million of early repayments. This included early extinguishment of $744 million in principal related to a portion of the SkyMiles Term Loan and various secured and unsecured notes, and approximately $150 million on finance leases that were scheduled to be paid later in 2024. We continue to seek opportunities to pre-pay our debt, in addition to periodic amortization and scheduled maturities.

Current wording

Debt and Finance Leases. In the nine months ended September 30, 2024, we had cash outflows of $2.4 billion related to repayments of our debt and finance lease obligations, including approximately $900 million of early repayments. This included early extinguishment of $744 million in principal related to a portion of the SkyMiles Term Loan and various secured and unsecured notes, and approximately $150 million on finance leases that were scheduled to be paid later in 2024. We continue to seek opportunities to pre-pay our debt, in addition to periodic amortization and scheduled maturities.

Previous wording

In February 2024, Moody's credit rating agency affirmed our credit rating and upgraded its outlook for Delta to positive.

Current wording

In February 2024, Moody's credit rating agency affirmed our credit rating and upgraded its outlook for Delta to positive. In July 2024, Fitch upgraded Delta's credit rating to BBB-, an investment-grade metric. See Note 5 of the Notes to the Condensed Consolidated Financial Statements for further information on the effect of these ratings changes on our debt agreements.

Previous wording

Capital Return to Shareholders. In the June 2024 quarter, the Board of Directors approved a quarterly dividend of $0.10 per share, which we paid on June 4, 2024 for total cash dividends of $64 million. Total cash dividends for the six months ended June 30, 2024 were $128 million.

Current wording

Capital Return to Shareholders. On August 20, 2024, we paid the dividend previously declared in the June 2024 quarter for total cash dividends of $96 million. Total cash dividends for the nine months ended September 30, 2024 were $225 million.