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Share Name | Share Symbol | Market | Type |
---|---|---|---|
Delta Air Lines Inc | NYSE:DAL | NYSE | Common Stock |
Price Change | % Change | Share Price | High Price | Low Price | Open Price | Shares Traded | Last Trade | |
---|---|---|---|---|---|---|---|---|
0.62 | 1.21% | 51.65 | 51.65 | 50.82 | 51.36 | 9,165,951 | 00:59:34 |
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þ
|
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
|
Or
|
|
o
|
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
|
|
Table of Contents
|
|
|
|
|
Page
|
|
|
|
|
|
|
|
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|
/s/ Ernst & Young LLP
|
Atlanta, Georgia
|
|
July 12, 2018
|
|
(in millions, except share data)
|
June 30,
2018 |
|
December 31,
2017 |
||||
ASSETS
|
|||||||
Current Assets:
|
|
|
|
||||
Cash and cash equivalents
|
$
|
1,886
|
|
|
$
|
1,814
|
|
Short-term investments
|
520
|
|
|
825
|
|
||
Accounts receivable, net of an allowance for uncollectible accounts of $13 and $12 at June 30, 2018
and December 31, 2017, respectively
|
2,427
|
|
|
2,377
|
|
||
Fuel inventory
|
1,149
|
|
|
916
|
|
||
Expendable parts and supplies inventories, net of an allowance for obsolescence of $122 and $113
at June 30, 2018 and December 31, 2017, respectively
|
440
|
|
|
413
|
|
||
Prepaid expenses and other
|
1,219
|
|
|
1,499
|
|
||
Total current assets
|
7,641
|
|
|
7,844
|
|
||
Property and Equipment, Net:
|
|
|
|
||||
Property and equipment, net of accumulated depreciation and amortization of $15,097 and $14,097
at June 30, 2018 and December 31, 2017, respectively
|
28,124
|
|
|
26,563
|
|
||
Other Assets:
|
|
|
|
||||
Goodwill
|
9,794
|
|
|
9,794
|
|
||
Identifiable intangibles, net of accumulated amortization of $853 and $845 at June 30, 2018
and December 31, 2017, respectively
|
4,839
|
|
|
4,847
|
|
||
Cash restricted for airport construction
|
1,326
|
|
|
—
|
|
||
Deferred income taxes, net
|
804
|
|
|
1,354
|
|
||
Other noncurrent assets
|
3,268
|
|
|
3,309
|
|
||
Total other assets
|
20,031
|
|
|
19,304
|
|
||
Total assets
|
$
|
55,796
|
|
|
$
|
53,711
|
|
LIABILITIES AND STOCKHOLDERS' EQUITY
|
|||||||
Current Liabilities:
|
|
|
|
||||
Current maturities of long-term debt and capital leases
|
$
|
1,342
|
|
|
$
|
2,242
|
|
Air traffic liability
|
6,360
|
|
|
4,364
|
|
||
Accounts payable
|
3,749
|
|
|
3,674
|
|
||
Accrued salaries and related benefits
|
2,436
|
|
|
3,022
|
|
||
Frequent flyer deferred revenue
|
2,799
|
|
|
2,762
|
|
||
Fuel card obligation
|
1,062
|
|
|
1,067
|
|
||
Other accrued liabilities
|
1,521
|
|
|
1,868
|
|
||
Total current liabilities
|
19,269
|
|
|
18,999
|
|
||
Noncurrent Liabilities:
|
|
|
|
||||
Long-term debt and capital leases
|
8,562
|
|
|
6,592
|
|
||
Pension, postretirement and related benefits
|
9,052
|
|
|
9,810
|
|
||
Frequent flyer deferred revenue
|
3,692
|
|
|
3,559
|
|
||
Other noncurrent liabilities
|
2,365
|
|
|
2,221
|
|
||
Total noncurrent liabilities
|
23,671
|
|
|
22,182
|
|
||
Commitments and Contingencies
|
|
|
|
||||
Stockholders' Equity:
|
|
|
|
||||
Common stock at $0.0001 par value; 1,500,000,000 shares authorized, 699,486,944 and 714,674,160
shares issued at June 30, 2018 and December 31, 2017, respectively
|
—
|
|
|
—
|
|
||
Additional paid-in capital
|
11,807
|
|
|
12,053
|
|
||
Retained earnings
|
8,851
|
|
|
8,256
|
|
||
Accumulated other comprehensive loss
|
(7,606
|
)
|
|
(7,621
|
)
|
||
Treasury stock, at cost, 8,155,625 and 7,476,181 shares at June 30, 2018 and December 31, 2017,
respectively
|
(196
|
)
|
|
(158
|
)
|
||
Total stockholders' equity
|
12,856
|
|
|
12,530
|
|
||
Total liabilities and stockholders' equity
|
$
|
55,796
|
|
|
$
|
53,711
|
|
|
|
|
|
||||
The accompanying notes are an integral part of these Condensed Consolidated Financial Statements.
|
|
Three Months Ended June 30,
|
|
Six Months Ended June 30,
|
||||||||||||
(in millions, except per share data)
|
2018
|
|
2017
|
|
2018
|
|
2017
|
||||||||
Operating Revenue:
|
|
|
|
|
|
|
|
||||||||
Passenger
|
$
|
10,546
|
|
|
$
|
9,768
|
|
|
19,311
|
|
|
17,946
|
|
||
Cargo
|
223
|
|
|
187
|
|
|
425
|
|
|
350
|
|
||||
Other
|
1,006
|
|
|
792
|
|
|
2,007
|
|
|
1,552
|
|
||||
Total operating revenue
|
11,775
|
|
|
10,747
|
|
|
21,743
|
|
|
19,848
|
|
||||
|
|
|
|
|
|
|
|
||||||||
Operating Expense:
|
|
|
|
|
|
|
|
||||||||
Salaries and related costs
|
2,668
|
|
|
2,521
|
|
|
5,252
|
|
|
4,906
|
|
||||
Aircraft fuel and related taxes
|
2,341
|
|
|
1,687
|
|
|
4,195
|
|
|
3,169
|
|
||||
Regional carriers expense, excluding fuel
|
883
|
|
|
838
|
|
|
1,739
|
|
|
1,702
|
|
||||
Depreciation and amortization
|
590
|
|
|
531
|
|
|
1,200
|
|
|
1,068
|
|
||||
Contracted services
|
540
|
|
|
525
|
|
|
1,084
|
|
|
1,029
|
|
||||
Ancillary businesses and refinery
|
494
|
|
|
296
|
|
|
987
|
|
|
588
|
|
||||
Passenger commissions and other selling expenses
|
511
|
|
|
467
|
|
|
938
|
|
|
872
|
|
||||
Aircraft maintenance materials and outside repairs
|
427
|
|
|
392
|
|
|
862
|
|
|
824
|
|
||||
Landing fees and other rents
|
407
|
|
|
373
|
|
|
780
|
|
|
734
|
|
||||
Profit sharing
|
400
|
|
|
338
|
|
|
583
|
|
|
489
|
|
||||
Passenger service
|
300
|
|
|
284
|
|
|
563
|
|
|
518
|
|
||||
Aircraft rent
|
97
|
|
|
86
|
|
|
191
|
|
|
170
|
|
||||
Other
|
437
|
|
|
427
|
|
|
849
|
|
|
798
|
|
||||
Total operating expense
|
10,095
|
|
|
8,765
|
|
|
19,223
|
|
|
16,867
|
|
||||
|
|
|
|
|
|
|
|
||||||||
Operating Income
|
1,680
|
|
|
1,982
|
|
|
2,520
|
|
|
2,981
|
|
||||
|
|
|
|
|
|
|
|
||||||||
Non-Operating Expense:
|
|
|
|
|
|
|
|
||||||||
Interest expense, net
|
(89
|
)
|
|
(103
|
)
|
|
(191
|
)
|
|
(197
|
)
|
||||
Unrealized gain/(loss) on investments, net
|
(238
|
)
|
|
—
|
|
|
(220
|
)
|
|
—
|
|
||||
Miscellaneous, net
|
19
|
|
|
(48
|
)
|
|
(19
|
)
|
|
(104
|
)
|
||||
Total non-operating expense, net
|
(308
|
)
|
|
(151
|
)
|
|
(430
|
)
|
|
(301
|
)
|
||||
|
|
|
|
|
|
|
|
||||||||
Income Before Income Taxes
|
1,372
|
|
|
1,831
|
|
|
2,090
|
|
|
2,680
|
|
||||
|
|
|
|
|
|
|
|
||||||||
Income Tax Provision
|
(347
|
)
|
|
(645
|
)
|
|
(518
|
)
|
|
(933
|
)
|
||||
|
|
|
|
|
|
|
|
||||||||
Net Income
|
$
|
1,025
|
|
|
$
|
1,186
|
|
|
$
|
1,572
|
|
|
$
|
1,747
|
|
|
|
|
|
|
|
|
|
||||||||
Basic Earnings Per Share
|
$
|
1.47
|
|
|
$
|
1.63
|
|
|
$
|
2.25
|
|
|
$
|
2.40
|
|
Diluted Earnings Per Share
|
$
|
1.47
|
|
|
$
|
1.62
|
|
|
$
|
2.24
|
|
|
$
|
2.39
|
|
Cash Dividends Declared Per Share
|
$
|
0.31
|
|
|
$
|
0.20
|
|
|
$
|
0.61
|
|
|
$
|
0.41
|
|
|
|
|
|
|
|
|
|
||||||||
Comprehensive Income
|
$
|
1,100
|
|
|
$
|
1,208
|
|
|
$
|
1,587
|
|
|
$
|
1,834
|
|
|
|
|
|
|
|
|
|
||||||||
The accompanying notes are an integral part of these Condensed Consolidated Financial Statements.
|
|
Three Months Ended June 30, 2017
|
|
Six Months Ended June 30, 2017
|
||||||||||||||||
(in millions, except per share data)
|
As Previously Reported
|
Adjustments
|
Current Presentation
|
|
As Previously Reported
|
Adjustments
|
Current Presentation
|
||||||||||||
Income statement:
|
|
|
|
|
|
|
|
||||||||||||
Passenger revenue
|
$
|
9,231
|
|
$
|
537
|
|
$
|
9,768
|
|
|
$
|
16,919
|
|
$
|
1,027
|
|
$
|
17,946
|
|
Cargo revenue
|
183
|
|
4
|
|
187
|
|
|
343
|
|
7
|
|
350
|
|
||||||
Other revenue
|
1,377
|
|
(585
|
)
|
792
|
|
|
2,677
|
|
(1,125
|
)
|
1,552
|
|
||||||
Total operating revenue
|
10,791
|
|
(44
|
)
|
10,747
|
|
|
19,939
|
|
(91
|
)
|
19,848
|
|
||||||
Operating expense
|
8,763
|
|
2
|
|
8,765
|
|
|
16,858
|
|
9
|
|
16,867
|
|
||||||
Non-operating expense
|
(137
|
)
|
(14
|
)
|
(151
|
)
|
|
(275
|
)
|
(26
|
)
|
(301
|
)
|
||||||
Income tax provision
|
(667
|
)
|
22
|
|
(645
|
)
|
|
(979
|
)
|
46
|
|
(933
|
)
|
||||||
Net income
|
1,224
|
|
(38
|
)
|
1,186
|
|
|
1,827
|
|
(80
|
)
|
1,747
|
|
||||||
Diluted earnings per share
|
$
|
1.68
|
|
$
|
(0.06
|
)
|
$
|
1.62
|
|
|
$
|
2.50
|
|
$
|
(0.11
|
)
|
$
|
2.39
|
|
|
December 31, 2017
|
||||||||
(in millions)
|
As Previously Reported
|
Adjustments
|
Current Presentation
|
||||||
Balance sheet:
|
|
|
|
||||||
Deferred income taxes, net
|
$
|
935
|
|
$
|
419
|
|
$
|
1,354
|
|
Air traffic liability
|
4,888
|
|
(524
|
)
|
4,364
|
|
|||
Frequent flyer deferred revenue (current and noncurrent)
|
4,118
|
|
2,203
|
|
6,321
|
|
|||
Other accrued and other noncurrent liabilities
|
3,969
|
|
120
|
|
4,089
|
|
|||
Retained earnings
|
9,636
|
|
(1,380
|
)
|
8,256
|
|
|
Three Months Ended June 30,
|
|
Six Months Ended June 30,
|
||||||||||
(in millions)
|
2018
|
2017
|
|
2018
|
2017
|
||||||||
Ticket
|
$
|
9,308
|
|
$
|
8,606
|
|
|
$
|
16,961
|
|
$
|
15,711
|
|
Loyalty travel awards
|
680
|
|
622
|
|
|
1,298
|
|
1,204
|
|
||||
Travel-related services
|
558
|
|
540
|
|
|
1,052
|
|
1,031
|
|
||||
Total passenger revenue
|
$
|
10,546
|
|
$
|
9,768
|
|
|
$
|
19,311
|
|
$
|
17,946
|
|
(in millions)
|
|
|
2018
|
2017
|
||||
Balance at January 1
|
|
|
$
|
6,321
|
|
$
|
5,922
|
|
Mileage credits earned
|
|
|
1,550
|
|
1,459
|
|
||
Travel mileage credits redeemed
|
|
|
(1,298
|
)
|
(1,204
|
)
|
||
Non-travel mileage credits redeemed
|
|
|
(82
|
)
|
(81
|
)
|
||
Balance at June 30
|
|
|
$
|
6,491
|
|
$
|
6,096
|
|
|
Three Months Ended June 30,
|
|
Six Months Ended June 30,
|
||||||||||
(in millions)
|
2018
|
2017
|
|
2018
|
2017
|
||||||||
Domestic
|
$
|
7,413
|
|
$
|
6,888
|
|
|
$
|
13,714
|
|
$
|
12,790
|
|
Atlantic
|
1,782
|
|
1,566
|
|
|
2,841
|
|
2,495
|
|
||||
Latin America
|
709
|
|
714
|
|
|
1,536
|
|
1,489
|
|
||||
Pacific
|
642
|
|
600
|
|
|
1,220
|
|
1,172
|
|
||||
Total passenger revenue
|
$
|
10,546
|
|
$
|
9,768
|
|
|
$
|
19,311
|
|
$
|
17,946
|
|
|
Three Months Ended June 30,
|
|
Six Months Ended June 30,
|
||||||||||
(in millions)
|
2018
|
2017
|
|
2018
|
2017
|
||||||||
Ancillary businesses and refinery
|
$
|
522
|
|
$
|
320
|
|
|
$
|
1,042
|
|
$
|
632
|
|
Loyalty program
|
358
|
|
316
|
|
|
705
|
|
621
|
|
||||
Miscellaneous
|
126
|
|
156
|
|
|
260
|
|
299
|
|
||||
Total other revenue
|
$
|
1,006
|
|
$
|
792
|
|
|
$
|
2,007
|
|
$
|
1,552
|
|
(in millions)
|
June 30,
2018 |
Level 1
|
Level 2
|
||||||
Cash equivalents
|
$
|
1,445
|
|
$
|
1,445
|
|
$
|
—
|
|
Short-term investments
|
|
|
|
||||||
U.S. government and agency securities
|
64
|
|
58
|
|
6
|
|
|||
Asset- and mortgage-backed securities
|
105
|
|
—
|
|
105
|
|
|||
Corporate obligations
|
275
|
|
—
|
|
275
|
|
|||
Other fixed income securities
|
76
|
|
—
|
|
76
|
|
|||
Restricted cash equivalents
|
1,374
|
|
1,374
|
|
—
|
|
|||
Long-term investments
|
739
|
|
712
|
|
27
|
|
|||
Hedge derivatives, net
|
|
|
|
||||||
Fuel hedge contracts
|
(32
|
)
|
8
|
|
(40
|
)
|
|||
Interest rate contracts
|
(24
|
)
|
—
|
|
(24
|
)
|
|||
Foreign currency exchange contracts
|
5
|
|
—
|
|
5
|
|
(in millions)
|
December 31,
2017 |
Level 1
|
Level 2
|
||||||
Cash equivalents
|
$
|
1,357
|
|
$
|
1,357
|
|
$
|
—
|
|
Short-term investments
|
|
|
|
|
|||||
U.S. government and agency securities
|
93
|
|
84
|
|
9
|
|
|||
Asset- and mortgage-backed securities
|
173
|
|
—
|
|
173
|
|
|||
Corporate obligations
|
467
|
|
—
|
|
467
|
|
|||
Other fixed income securities
|
92
|
|
—
|
|
92
|
|
|||
Restricted cash equivalents
|
38
|
|
38
|
|
—
|
|
|||
Long-term investments
|
513
|
|
485
|
|
28
|
|
|||
Hedge derivatives, net
|
|
|
|
||||||
Fuel hedge contracts
|
(66
|
)
|
(43
|
)
|
(23
|
)
|
|||
Foreign currency exchange contracts
|
(17
|
)
|
—
|
|
(17
|
)
|
•
|
Fuel Contracts.
Our fuel hedge portfolio consists of options, swaps and futures. The hedge contracts include crude oil and refined products, as these commodities are highly correlated with the price of fuel that we consume. Option contracts are valued under an income approach using option pricing models based on data either readily observable in public markets, derived from public markets or provided by counterparties who regularly trade in public markets. Volatilities used in these valuations ranged from
16%
to
32%
depending on the maturity dates, underlying commodities and strike prices of the option contracts. Swap contracts are valued under an income approach using a discounted cash flow model based on data either readily observable or provided by counterparties who regularly trade in public markets. Discount rates used in these valuations vary based on maturity dates utilizing the London interbank offered rate ("LIBOR"). Futures contracts and options on futures contracts are traded on a public exchange and valued based on quoted market prices.
|
•
|
Interest Rate Contracts.
Our interest rate derivatives are swap contracts and they are valued based on data readily observable in public markets.
|
•
|
Foreign Currency Exchange Contracts.
Our foreign currency derivatives consist of Japanese yen and Euro forward contracts and are valued based on data readily observable in public markets.
|
(in millions)
|
Total
|
||||
Due in one year or less
|
$
|
189
|
|
||
Due after one year through three years
|
306
|
|
|||
Due after three years through five years
|
10
|
|
|||
Due after five years
|
15
|
|
|||
Total
|
$
|
520
|
|
•
|
Aeroméxico
. We have a non-controlling
49%
equity stake in Grupo Aeroméxico, the parent company of Aeroméxico.
|
•
|
Virgin Atlantic.
We have a non-controlling
49%
equity stake in Virgin Atlantic Limited, the parent company of Virgin Atlantic Airways.
|
•
|
Air France-KLM.
We own
9%
of the outstanding shares of Air France-KLM. In addition, we have developed a combined long-term joint venture with Air France-KLM and Virgin Atlantic, subject to required regulatory approvals.
|
•
|
GOL.
Through our investment in preferred shares of GOL's parent company, we own
9%
of GOL's outstanding capital stock.
|
•
|
China Eastern.
We have a
3%
equity interest in China Eastern.
|
(in millions)
|
Volume
|
|
Final Maturity Date
|
Prepaid Expenses and Other
|
Other Noncurrent Assets
|
Other Accrued Liabilities
|
Other Noncurrent Liabilities
|
Hedge Derivatives, net
|
|||||||||||
Designated as hedges
|
|
|
|
|
|
|
|
|
|||||||||||
Interest rate contracts (fair value hedges)
|
1,908
|
|
U.S. dollars
|
April 2028
|
$
|
4
|
|
$
|
—
|
|
$
|
(7
|
)
|
$
|
(21
|
)
|
$
|
(24
|
)
|
Foreign currency exchange contracts
|
15,285
|
|
Japanese yen
|
November 2019
|
—
|
|
—
|
|
(1
|
)
|
—
|
|
(1
|
)
|
|||||
Not designated as hedges
|
|
|
|
|
|
|
|
|
|||||||||||
Foreign currency exchange contract
|
375
|
|
Euros
|
December 2020
|
10
|
|
—
|
|
—
|
|
(4
|
)
|
6
|
|
|||||
Fuel hedge contracts
|
334
|
|
gallons - crude oil and refined products
|
December 2019
|
70
|
|
12
|
|
(98
|
)
|
(16
|
)
|
(32
|
)
|
|||||
Total derivative contracts
|
|
|
$
|
84
|
|
$
|
12
|
|
$
|
(106
|
)
|
$
|
(41
|
)
|
$
|
(51
|
)
|
(in millions)
|
Volume
|
|
Final Maturity Date
|
Prepaid Expenses and Other
|
Other Noncurrent Assets
|
Other Accrued Liabilities
|
Other Noncurrent Liabilities
|
Hedge Derivatives, net
|
|||||||||||
Designated as hedges
|
|
|
|
|
|
|
|
|
|||||||||||
Foreign currency exchange contracts
|
23,512
|
|
Japanese yen
|
November 2019
|
$
|
1
|
|
$
|
1
|
|
$
|
(13
|
)
|
$
|
(6
|
)
|
$
|
(17
|
)
|
490
|
|
Canadian dollars
|
May 2020
|
||||||||||||||||
Not designated as hedges
|
|
|
|
|
|
|
|
|
|||||||||||
Fuel hedge contracts
|
249
|
|
gallons - crude oil and refined products
|
May 2019
|
638
|
|
8
|
|
(694
|
)
|
(18
|
)
|
(66
|
)
|
|||||
Total derivative contracts
|
|
|
$
|
639
|
|
$
|
9
|
|
$
|
(707
|
)
|
$
|
(24
|
)
|
$
|
(83
|
)
|
(in millions)
|
Prepaid Expenses and Other
|
Other Noncurrent Assets
|
Other Accrued Liabilities
|
Other Noncurrent Liabilities
|
Hedge Derivatives, net
|
||||||||||
June 30, 2018
|
|
|
|
|
|
||||||||||
Net derivative contracts
|
$
|
22
|
|
$
|
9
|
|
$
|
(54
|
)
|
$
|
(28
|
)
|
$
|
(51
|
)
|
December 31, 2017
|
|
|
|
|
|
||||||||||
Net derivative contracts
|
$
|
—
|
|
$
|
1
|
|
$
|
(68
|
)
|
$
|
(16
|
)
|
$
|
(83
|
)
|
|
Effective Portion Reclassified from AOCI to Earnings
|
|
Effective Portion Recognized in Other Comprehensive Income
|
||||||||||
(in millions)
|
2018
|
2017
|
|
2018
|
2017
|
||||||||
Three Months Ended June 30,
|
|
|
|
|
|
||||||||
Foreign currency exchange contracts
|
$
|
(2
|
)
|
$
|
4
|
|
|
$
|
9
|
|
$
|
(8
|
)
|
Six Months Ended June 30,
|
|
|
|
|
|
||||||||
Foreign currency exchange contracts
|
$
|
3
|
|
$
|
11
|
|
|
$
|
—
|
|
$
|
(33
|
)
|
|
Maturity
|
Interest Rate(s)
(5)
Per Annum at
|
June 30,
|
December 31,
|
||||||||
(in millions)
|
Dates
|
June 30, 2018
|
2018
|
2017
|
||||||||
Pacific Facilities:
|
|
|
|
|
|
|
|
|
||||
Pacific Term Loan B-1
|
n/a
|
n/a
|
|
n/a
|
$
|
—
|
|
$
|
1,048
|
|
||
Pacific Revolving Credit Facility
|
n/a
|
n/a
|
|
n/a
|
—
|
|
—
|
|
||||
2015 Credit Facilities:
|
|
|
|
|
|
|
|
|
||||
Term Loan Facility
|
n/a
|
n/a
|
|
n/a
|
—
|
|
490
|
|
||||
Revolving Credit Facility
|
n/a
|
n/a
|
|
n/a
|
—
|
|
—
|
|
||||
Financing arrangements secured by aircraft:
|
|
|
|
|
|
|
|
|
||||
Certificates
(1)
|
2018
|
to
|
2027
|
3.63%
|
to
|
8.02%
|
2,207
|
|
2,380
|
|
||
Notes
(1)
|
2018
|
to
|
2027
|
2.75%
|
to
|
6.76%
|
1,647
|
|
1,961
|
|
||
2018 Unsecured notes
|
2021
|
to
|
2028
|
3.40%
|
to
|
4.38%
|
1,600
|
|
—
|
|
||
2018 Unsecured revolving credit facility
|
2021
|
to
|
2023
|
undrawn
|
variable
(4)
|
—
|
|
—
|
|
|||
NYTDC Special Facilities Revenue Bonds, Series 2018
(1)
|
2022
|
to
|
2036
|
4.00%
|
to
|
5.00%
|
1,383
|
|
—
|
|
||
Other unsecured notes
|
2020
|
to
|
2022
|
2.60%
|
to
|
3.63%
|
2,450
|
|
2,450
|
|
||
Other financings
(1)(2)
|
2019
|
to
|
2030
|
1.81%
|
to
|
8.75%
|
204
|
|
210
|
|
||
Other revolving credit facilities
(3)
|
2019
|
to
|
2021
|
undrawn
|
variable
(4)
|
—
|
|
—
|
|
|||
Total secured and unsecured debt
|
|
|
|
|
|
|
9,491
|
|
8,539
|
|
||
Unamortized premium (discount) and debt issue cost, net
|
|
|
|
|
|
|
23
|
|
(99
|
)
|
||
Total debt
|
|
|
|
|
|
|
9,514
|
|
8,440
|
|
||
Less: current maturities
|
|
|
|
|
|
|
(1,256
|
)
|
(2,145
|
)
|
||
Total long-term debt
|
|
|
|
|
|
|
$
|
8,258
|
|
$
|
6,295
|
|
(1)
|
Due in installments.
|
(2)
|
Primarily includes unsecured bonds and debt secured by certain accounts receivable and real estate.
|
(3)
|
Guaranteed by substantially all of our domestic subsidiaries (the "Guarantors"). As of June 30, 2018, we have
$436 million
available under these revolving credit facilities, all of which are undrawn.
|
(4)
|
Interest rate equal to LIBOR (generally subject to a floor) or another index rate, in each case plus a specified margin.
|
(5)
|
Certain aircraft and other financings are comprised of variable rate debt.
|
(in millions)
|
June 30,
2018 |
December 31,
2017 |
||||
Total debt at par value
|
$
|
9,491
|
|
$
|
8,539
|
|
Unamortized premium (discount) and debt issue cost, net
|
23
|
|
(99
|
)
|
||
Net carrying amount
|
$
|
9,514
|
|
$
|
8,440
|
|
|
|
|
||||
Fair value
|
$
|
9,700
|
|
$
|
8,700
|
|
|
Pension Benefits
|
Other Postretirement and Postemployment Benefits
|
||||||||||
(in millions)
|
2018
|
2017
|
2018
|
2017
|
||||||||
Three Months Ended June 30,
|
|
|
|
|
||||||||
Service cost
|
$
|
—
|
|
$
|
—
|
|
$
|
21
|
|
$
|
22
|
|
Interest cost
|
195
|
|
213
|
|
32
|
|
35
|
|
||||
Expected return on plan assets
|
(329
|
)
|
(286
|
)
|
(17
|
)
|
(17
|
)
|
||||
Amortization of prior service credit
|
—
|
|
—
|
|
(7
|
)
|
(7
|
)
|
||||
Recognized net actuarial loss
|
66
|
|
66
|
|
10
|
|
8
|
|
||||
Settlements
|
4
|
|
—
|
|
—
|
|
—
|
|
||||
Net (benefit) cost
|
$
|
(64
|
)
|
$
|
(7
|
)
|
$
|
39
|
|
$
|
41
|
|
|
|
|
|
|
||||||||
Six Months Ended June 30,
|
|
|
|
|
||||||||
Service cost
|
$
|
—
|
|
$
|
—
|
|
$
|
43
|
|
$
|
44
|
|
Interest cost
|
390
|
|
426
|
|
63
|
|
70
|
|
||||
Expected return on plan assets
|
(659
|
)
|
(572
|
)
|
(34
|
)
|
(34
|
)
|
||||
Amortization of prior service credit
|
—
|
|
—
|
|
(13
|
)
|
(14
|
)
|
||||
Recognized net actuarial loss
|
134
|
|
132
|
|
18
|
|
16
|
|
||||
Settlements
|
4
|
|
—
|
|
—
|
|
—
|
|
||||
Net (benefit) cost
|
$
|
(131
|
)
|
$
|
(14
|
)
|
$
|
77
|
|
$
|
82
|
|
(in millions)
|
Total
|
||
Six months ending December 31, 2018
|
$
|
1,350
|
|
2019
|
3,470
|
|
|
2020
|
3,420
|
|
|
2021
|
3,910
|
|
|
2022
|
2,450
|
|
|
Thereafter
|
1,780
|
|
|
Total
|
$
|
16,380
|
|
Aircraft Type
|
|
Purchase Commitments
|
|
A220-100 (formerly called CS100)
|
|
75
|
|
A321-200
|
|
71
|
|
A321-200neo
|
|
100
|
|
A330-900neo
|
|
25
|
|
A350-900
|
|
14
|
|
B-737-900ER
|
|
30
|
|
CRJ-900
|
|
20
|
|
Total
|
|
335
|
|
(in millions)
|
Pension and Other Benefits Liabilities
(3)
|
Derivative Contracts and Other
|
Available-for-Sale Investments
|
Total
|
||||||||
Balance at January 1, 2018 (net of tax effect of $1,400)
|
$
|
(7,812
|
)
|
$
|
85
|
|
$
|
106
|
|
$
|
(7,621
|
)
|
Changes in value (net of tax effect of $1)
|
—
|
|
4
|
|
—
|
|
4
|
|
||||
Reclassifications into retained earnings (net of tax effect of $61)
(1)
|
—
|
|
—
|
|
(106
|
)
|
(106
|
)
|
||||
Reclassifications into earnings (net of tax effect of $35)
(2)
|
111
|
|
6
|
|
—
|
|
117
|
|
||||
Balance at June 30, 2018 (net of tax effect of $1,426)
|
$
|
(7,701
|
)
|
$
|
95
|
|
$
|
—
|
|
$
|
(7,606
|
)
|
|
|
|
|
|
||||||||
Balance at January 1, 2017 (net of tax effect of $1,458)
|
$
|
(7,714
|
)
|
$
|
114
|
|
$
|
(36
|
)
|
$
|
(7,636
|
)
|
Changes in value (net of tax effect of $6)
|
—
|
|
(14
|
)
|
32
|
|
18
|
|
||||
Reclassifications into earnings (net of tax effect of $40)
(2)
|
83
|
|
(7
|
)
|
(7
|
)
|
69
|
|
||||
Balance at June 30, 2017 (net of tax effect of $1,424)
|
$
|
(7,631
|
)
|
$
|
93
|
|
$
|
(11
|
)
|
$
|
(7,549
|
)
|
(1)
|
The reclassification into retained earnings relates to our investments in GOL, China Eastern and other available-for-sale investments, and the related conversion to accounting for changes in fair value of these investments from AOCI to the income statement. See Note 1, "Summary of Significant Accounting Policies," for more information.
|
(2)
|
Amounts reclassified from AOCI for pension and other benefits liabilities and for derivative contracts designated as foreign currency cash flow hedges are recorded in miscellaneous, net and in passenger revenue, respectively, in the income statement. The reclassification into earnings for investments relates to our investment in Grupo Aeroméxico and the related conversion to accounting under the equity method. The reclassification of the unrealized gain was recorded to non-operating expense in our income statement.
|
(3)
|
Includes $
700 million
of deferred income tax expense primarily related to pension and other benefit obligations that will not be recognized in net income until these obligations are fully extinguished. We consider all income sources, including other comprehensive income, in determining the amount of tax benefit allocated to continuing operations.
|
(in millions)
|
Airline
|
Refinery
|
|
Intersegment Sales/Other
|
|
Consolidated
|
||||||||
Three Months Ended June 30, 2018
|
|
|
|
|
|
|
||||||||
Operating revenue:
|
$
|
11,559
|
|
$
|
1,667
|
|
|
|
|
$
|
11,775
|
|
||
Sales to airline segment
|
|
|
|
$
|
(275
|
)
|
(1)
|
|
||||||
Exchanged products
|
|
|
|
(1,096
|
)
|
(2)
|
|
|||||||
Sales of refined products
|
|
|
|
(80
|
)
|
(3)
|
|
|||||||
Operating income
|
1,635
|
|
45
|
|
|
—
|
|
|
1,680
|
|
||||
Interest expense (income), net
|
97
|
|
(8
|
)
|
|
—
|
|
|
89
|
|
||||
Depreciation and amortization
|
573
|
|
17
|
|
|
—
|
|
|
590
|
|
||||
Total assets, end of period
|
53,335
|
|
2,461
|
|
|
—
|
|
|
55,796
|
|
||||
Capital expenditures
|
1,567
|
|
13
|
|
|
—
|
|
|
1,580
|
|
||||
|
|
|
|
|
|
|
||||||||
Three Months Ended June 30, 2017
|
|
|
|
|
|
|
||||||||
Operating revenue:
|
$
|
10,680
|
|
$
|
1,139
|
|
|
|
|
$
|
10,747
|
|
||
Sales to airline segment
|
|
|
|
$
|
(193
|
)
|
(1)
|
|
||||||
Exchanged products
|
|
|
|
(756
|
)
|
(2)
|
|
|||||||
Sales of refined products
|
|
|
|
(123
|
)
|
(3)
|
|
|||||||
Operating income
|
1,976
|
|
6
|
|
|
—
|
|
|
1,982
|
|
||||
Interest expense, net
|
103
|
|
—
|
|
|
—
|
|
|
103
|
|
||||
Depreciation and amortization
|
520
|
|
11
|
|
|
—
|
|
|
531
|
|
||||
Total assets, end of period
|
50,964
|
|
1,487
|
|
|
—
|
|
|
52,451
|
|
||||
Capital expenditures
|
928
|
|
60
|
|
|
—
|
|
|
988
|
|
(1)
|
Represents transfers, valued on a market price basis, from the refinery to the airline segment for use in airline operations. We determine market price by reference to the market index for the primary delivery location, which is New York Harbor, for jet fuel from the refinery.
|
(2)
|
Represents value of products delivered under our exchange agreements, as discussed above, determined on a market price basis.
|
(3)
|
These sales were at or near cost; accordingly, the margin on these sales is de minimis.
|
(in millions)
|
Airline
|
Refinery
|
|
Intersegment Sales/Other
|
|
Consolidated
|
||||||||
Six Months Ended June 30, 2018
|
|
|
|
|
|
|
||||||||
Operating revenue:
|
$
|
21,314
|
|
$
|
3,158
|
|
|
|
|
$
|
21,743
|
|
||
Sales to airline segment
|
|
|
|
$
|
(537
|
)
|
(1)
|
|
||||||
Exchanged products
|
|
|
|
(1,972
|
)
|
(2)
|
|
|||||||
Sales of refined products
|
|
|
|
(220
|
)
|
(3)
|
|
|||||||
Operating income
|
2,431
|
|
89
|
|
|
—
|
|
|
2,520
|
|
||||
Interest expense (income), net
|
203
|
|
(12
|
)
|
|
—
|
|
|
191
|
|
||||
Depreciation and amortization
|
1,168
|
|
32
|
|
|
—
|
|
|
1,200
|
|
||||
Capital expenditures
|
2,818
|
|
28
|
|
|
—
|
|
|
2,846
|
|
||||
|
|
|
|
|
|
|
||||||||
Six Months Ended June 30, 2017
|
|
|
|
|
|
|
||||||||
Operating revenue:
|
$
|
19,720
|
|
$
|
2,267
|
|
|
|
|
$
|
19,848
|
|
||
Sales to airline segment
|
|
|
|
$
|
(383
|
)
|
(1)
|
|
||||||
Exchanged products
|
|
|
|
(1,489
|
)
|
(2)
|
|
|||||||
Sales of refined products
|
|
|
|
(267
|
)
|
(3)
|
|
|||||||
Operating income
|
2,931
|
|
50
|
|
|
—
|
|
|
2,981
|
|
||||
Interest expense, net
|
197
|
|
—
|
|
|
—
|
|
|
197
|
|
||||
Depreciation and amortization
|
1,047
|
|
21
|
|
|
—
|
|
|
1,068
|
|
||||
Capital expenditures
|
1,704
|
|
86
|
|
|
—
|
|
|
1,790
|
|
(1)
|
Represents transfers, valued on a market price basis, from the refinery to the airline segment for use in airline operations. We determine market price by reference to the market index for the primary delivery location, which is New York Harbor, for jet fuel from the refinery.
|
(2)
|
Represents value of products delivered under our exchange agreements, as discussed above, determined on a market price basis.
|
(3)
|
These sales were at or near cost; accordingly, the margin on these sales is de minimis.
|
(in millions)
|
Lease Restructuring
|
||
Liability as of January 1, 2018
|
$
|
237
|
|
Payments
|
(39
|
)
|
|
Additional expenses and other
|
1
|
|
|
Liability as of June 30, 2018
|
$
|
199
|
|
|
Three Months Ended June 30,
|
|
Six Months Ended June 30,
|
||||||||||
(in millions, except per share data)
|
2018
|
2017
|
|
2018
|
2017
|
||||||||
Net income
|
$
|
1,025
|
|
$
|
1,186
|
|
|
$
|
1,572
|
|
$
|
1,747
|
|
|
|
|
|
|
|
||||||||
Basic weighted average shares outstanding
|
695
|
|
728
|
|
|
699
|
|
728
|
|
||||
Dilutive effect of share-based awards
|
2
|
|
3
|
|
|
2
|
|
3
|
|
||||
Diluted weighted average shares outstanding
|
697
|
|
731
|
|
|
701
|
|
731
|
|
||||
|
|
|
|
|
|
||||||||
Basic earnings per share
|
$
|
1.47
|
|
$
|
1.63
|
|
|
$
|
2.25
|
|
$
|
2.40
|
|
Diluted earnings per share
|
$
|
1.47
|
|
$
|
1.62
|
|
|
$
|
2.24
|
|
$
|
2.39
|
|
|
Three Months Ended June 30,
|
Increase (Decrease)
|
% Increase (Decrease)
|
||||||||
(in millions)
|
2018
|
2017
|
|||||||||
Passenger
|
$
|
10,546
|
|
$
|
9,768
|
|
$
|
778
|
|
8.0
|
%
|
Cargo
|
223
|
|
187
|
|
36
|
|
19.1
|
%
|
|||
Other
|
1,006
|
|
792
|
|
214
|
|
27.1
|
%
|
|||
Total operating revenue
|
$
|
11,775
|
|
$
|
10,747
|
|
$
|
1,028
|
|
9.6
|
%
|
|
|
|
|
|
|||||||
TRASM (cents)
|
|
17.19
|
¢
|
|
16.23
|
¢
|
|
0.96
|
¢
|
5.9
|
%
|
Third-party refinery sales
(1)
|
(0.32
|
)
|
(0.10
|
)
|
(0.22
|
)
|
NM
|
|
|||
TRASM, adjusted (cents)
|
|
16.87
|
¢
|
|
16.13
|
¢
|
|
0.74
|
¢
|
4.6
|
%
|
(1)
|
For additional information on adjusting for third-party refinery sales, see "Supplemental Information" below.
|
|
Three Months Ended June 30,
|
Increase (Decrease)
|
% Increase (Decrease)
|
||||||||
(in millions)
|
2018
|
2017
|
|||||||||
Ticket
|
$
|
9,308
|
|
$
|
8,606
|
|
$
|
702
|
|
8.2
|
%
|
Loyalty travel awards
|
680
|
|
622
|
|
58
|
|
9.3
|
%
|
|||
Travel-related services
|
558
|
|
540
|
|
18
|
|
3.3
|
%
|
|||
Total passenger revenue
|
$
|
10,546
|
|
$
|
9,768
|
|
$
|
778
|
|
8.0
|
%
|
|
|
Increase (Decrease)
vs. Three Months Ended June 30, 2017
|
||||||||||||||
(in millions)
|
Three Months Ended June 30, 2018
|
Passenger Revenue
|
RPMs
(Traffic)
|
ASMs
(Capacity)
|
Passenger Mile Yield
|
PRASM
|
Load Factor
|
|||||||||
Domestic
|
$
|
7,413
|
|
7.6
|
%
|
4.9
|
%
|
5.5
|
%
|
2.5
|
%
|
2.0
|
%
|
(0.5
|
)
|
pts
|
Atlantic
|
1,782
|
|
13.9
|
%
|
2.4
|
%
|
2.4
|
%
|
11.1
|
%
|
11.2
|
%
|
0.1
|
|
pts
|
|
Latin America
|
709
|
|
(0.8
|
)%
|
(3.1
|
)%
|
(1.3
|
)%
|
2.4
|
%
|
0.6
|
%
|
(1.6
|
)
|
pts
|
|
Pacific
|
642
|
|
6.9
|
%
|
(1.0
|
)%
|
(3.1
|
)%
|
8.0
|
%
|
10.4
|
%
|
1.9
|
|
pts
|
|
Total
|
$
|
10,546
|
|
8.0
|
%
|
3.2
|
%
|
3.5
|
%
|
4.6
|
%
|
4.4
|
%
|
(0.2
|
)
|
pts
|
|
Three Months Ended June 30,
|
Increase (Decrease)
|
% Increase (Decrease)
|
||||||||
(in millions)
|
2018
|
2017
|
|||||||||
Ancillary businesses and refinery
|
$
|
522
|
|
$
|
320
|
|
$
|
202
|
|
63.1
|
%
|
Loyalty program
|
358
|
|
316
|
|
42
|
|
13.3
|
%
|
|||
Miscellaneous
|
126
|
|
156
|
|
(30
|
)
|
(19.2
|
)%
|
|||
Total other revenue
|
$
|
1,006
|
|
$
|
792
|
|
$
|
214
|
|
27.1
|
%
|
|
Three Months Ended June 30,
|
Increase (Decrease)
|
% Increase (Decrease)
|
||||||||
(in millions)
|
2018
|
2017
|
|||||||||
Salaries and related costs
|
$
|
2,668
|
|
$
|
2,521
|
|
$
|
147
|
|
5.8
|
%
|
Aircraft fuel and related taxes
|
2,341
|
|
1,687
|
|
654
|
|
38.8
|
%
|
|||
Regional carriers expense, excluding fuel
|
883
|
|
838
|
|
45
|
|
5.4
|
%
|
|||
Depreciation and amortization
|
590
|
|
531
|
|
59
|
|
11.1
|
%
|
|||
Contracted services
|
540
|
|
525
|
|
15
|
|
2.9
|
%
|
|||
Ancillary businesses and refinery
|
494
|
|
296
|
|
198
|
|
66.9
|
%
|
|||
Passenger commissions and other selling expenses
|
511
|
|
467
|
|
44
|
|
9.4
|
%
|
|||
Aircraft maintenance materials and outside repairs
|
427
|
|
392
|
|
35
|
|
8.9
|
%
|
|||
Landing fees and other rents
|
407
|
|
373
|
|
34
|
|
9.1
|
%
|
|||
Profit sharing
|
400
|
|
338
|
|
62
|
|
18.3
|
%
|
|||
Passenger service
|
300
|
|
284
|
|
16
|
|
5.6
|
%
|
|||
Aircraft rent
|
97
|
|
86
|
|
11
|
|
12.8
|
%
|
|||
Other
|
437
|
|
427
|
|
10
|
|
2.3
|
%
|
|||
Total operating expense
|
$
|
10,095
|
|
$
|
8,765
|
|
$
|
1,330
|
|
15.2
|
%
|
|
|
Average Price Per Gallon
|
||||||||||||||||
|
Three Months Ended June 30,
|
Change
|
Three Months Ended June 30,
|
Change
|
||||||||||||||
(in millions, except per gallon data)
|
2018
|
2017
|
2018
|
2017
|
||||||||||||||
Fuel purchase cost
(1)
|
$
|
2,361
|
|
$
|
1,676
|
|
$
|
685
|
|
$
|
2.21
|
|
$
|
1.60
|
|
$
|
0.61
|
|
Airline segment fuel hedge impact
|
25
|
|
17
|
|
8
|
|
0.02
|
|
0.02
|
|
—
|
|
||||||
Refinery segment impact
|
(45
|
)
|
(6
|
)
|
(39
|
)
|
(0.04
|
)
|
(0.01
|
)
|
(0.03
|
)
|
||||||
Total fuel expense
|
$
|
2,341
|
|
$
|
1,687
|
|
$
|
654
|
|
$
|
2.19
|
|
$
|
1.61
|
|
$
|
0.58
|
|
MTM adjustments and settlements
(2)
|
(24
|
)
|
52
|
|
(76
|
)
|
(0.02
|
)
|
0.05
|
|
(0.07
|
)
|
||||||
Total fuel expense, adjusted
|
$
|
2,317
|
|
$
|
1,739
|
|
$
|
578
|
|
$
|
2.17
|
|
$
|
1.66
|
|
$
|
0.51
|
|
(1)
|
Market price for jet fuel at airport locations, including related taxes and transportation costs.
|
(2)
|
Mark-to-market ("MTM") adjustments and settlements include the effects of the derivative transactions discussed in
Note 5
of the Notes to the Condensed Consolidated Financial Statements. For additional information and the reason for adjusting fuel expense, see "Supplemental Information" below.
|
|
Six Months Ended June 30,
|
Increase (Decrease)
|
% Increase (Decrease)
|
||||||||
(in millions)
|
2018
|
2017
|
|||||||||
Passenger
|
$
|
19,311
|
|
$
|
17,946
|
|
$
|
1,365
|
|
7.6
|
%
|
Cargo
|
425
|
|
350
|
|
75
|
|
21.4
|
%
|
|||
Other
|
2,007
|
|
1,552
|
|
455
|
|
29.3
|
%
|
|||
Total operating revenue
|
$
|
21,743
|
|
$
|
19,848
|
|
$
|
1,895
|
|
9.5
|
%
|
|
|
|
|
|
|||||||
TRASM (cents)
|
|
16.99
|
¢
|
|
15.99
|
¢
|
|
1.00
|
¢
|
6.3
|
%
|
Third-party refinery sales
(1)
|
(0.33
|
)
|
(0.11
|
)
|
(0.22
|
)
|
NM
|
|
|||
TRASM, adjusted (cents)
|
|
16.66
|
¢
|
|
15.89
|
¢
|
|
0.77
|
¢
|
4.8
|
%
|
(1)
|
For additional information on adjusting for third-party refinery sales, see "Supplemental Information" below.
|
|
Six Months Ended June 30,
|
Increase (Decrease)
|
% Increase (Decrease)
|
||||||||
(in millions)
|
2018
|
2017
|
|||||||||
Ticket
|
$
|
16,961
|
|
$
|
15,711
|
|
$
|
1,250
|
|
8.0
|
%
|
Loyalty travel awards
|
1,298
|
|
1,204
|
|
94
|
|
7.8
|
%
|
|||
Travel-related services
|
1,052
|
|
1,031
|
|
21
|
|
2.0
|
%
|
|||
Total passenger revenue
|
$
|
19,311
|
|
$
|
17,946
|
|
$
|
1,365
|
|
7.6
|
%
|
|
|
Increase (Decrease)
vs. Six Months Ended June 30, 2017
|
||||||||||||||
(in millions)
|
Six Months Ended June 30, 2018
|
Passenger Revenue
|
RPMs
(Traffic)
|
ASMs
(Capacity)
|
Passenger Mile Yield
|
PRASM
|
Load Factor
|
|||||||||
Domestic
|
$
|
13,714
|
|
7.2
|
%
|
4.1
|
%
|
4.7
|
%
|
3.0
|
%
|
2.4
|
%
|
(0.5
|
)
|
pts
|
Atlantic
|
2,841
|
|
13.9
|
%
|
3.6
|
%
|
2.6
|
%
|
9.9
|
%
|
11.0
|
%
|
0.8
|
|
pts
|
|
Latin America
|
1,536
|
|
3.2
|
%
|
(1.2
|
)%
|
(0.1
|
)%
|
4.4
|
%
|
3.3
|
%
|
(0.9
|
)
|
pts
|
|
Pacific
|
1,220
|
|
4.1
|
%
|
(1.3
|
)%
|
(2.6
|
)%
|
5.4
|
%
|
6.8
|
%
|
1.2
|
|
pts
|
|
Total
|
$
|
19,311
|
|
7.6
|
%
|
3.0
|
%
|
3.1
|
%
|
4.5
|
%
|
4.4
|
%
|
(0.1
|
)
|
pts
|
|
Six Months Ended June 30,
|
Increase (Decrease)
|
% Increase (Decrease)
|
||||||||
(in millions)
|
2018
|
2017
|
|||||||||
Ancillary businesses and refinery
|
$
|
1,042
|
|
$
|
632
|
|
$
|
410
|
|
64.9
|
%
|
Loyalty program
|
705
|
|
621
|
|
84
|
|
13.5
|
%
|
|||
Miscellaneous
|
260
|
|
299
|
|
(39
|
)
|
(13.0
|
)%
|
|||
Total other revenue
|
$
|
2,007
|
|
$
|
1,552
|
|
$
|
455
|
|
29.3
|
%
|
|
Six Months Ended June 30,
|
Increase (Decrease)
|
% Increase (Decrease)
|
||||||||
(in millions)
|
2018
|
2017
|
|||||||||
Salaries and related costs
|
$
|
5,252
|
|
$
|
4,906
|
|
$
|
346
|
|
7.1
|
%
|
Aircraft fuel and related taxes
|
4,195
|
|
3,169
|
|
1,026
|
|
32.4
|
%
|
|||
Regional carriers expense, excluding fuel
|
1,739
|
|
1,702
|
|
37
|
|
2.2
|
%
|
|||
Depreciation and amortization
|
1,200
|
|
1,068
|
|
132
|
|
12.4
|
%
|
|||
Contracted services
|
1,084
|
|
1,029
|
|
55
|
|
5.3
|
%
|
|||
Ancillary businesses and refinery
|
987
|
|
588
|
|
399
|
|
67.9
|
%
|
|||
Passenger commissions and other selling expenses
|
938
|
|
872
|
|
66
|
|
7.6
|
%
|
|||
Aircraft maintenance materials and outside repairs
|
862
|
|
824
|
|
38
|
|
4.6
|
%
|
|||
Landing fees and other rents
|
780
|
|
734
|
|
46
|
|
6.3
|
%
|
|||
Profit sharing
|
583
|
|
489
|
|
94
|
|
19.2
|
%
|
|||
Passenger service
|
563
|
|
518
|
|
45
|
|
8.7
|
%
|
|||
Aircraft rent
|
191
|
|
170
|
|
21
|
|
12.4
|
%
|
|||
Other
|
849
|
|
798
|
|
51
|
|
6.4
|
%
|
|||
Total operating expense
|
$
|
19,223
|
|
$
|
16,867
|
|
$
|
2,356
|
|
14.0
|
%
|
|
|
Average Price Per Gallon
|
||||||||||||||||
|
Six Months Ended June 30,
|
Change
|
Six Months Ended June 30,
|
Change
|
||||||||||||||
(in millions, except per gallon data)
|
2018
|
2017
|
2018
|
2017
|
||||||||||||||
Fuel purchase cost
(1)
|
$
|
4,289
|
|
$
|
3,207
|
|
$
|
1,082
|
|
$
|
2.14
|
|
$
|
1.63
|
|
$
|
0.51
|
|
Airline segment fuel hedge impact
|
(5
|
)
|
12
|
|
(17
|
)
|
—
|
|
0.01
|
|
(0.01
|
)
|
||||||
Refinery segment impact
|
(89
|
)
|
(50
|
)
|
(39
|
)
|
(0.04
|
)
|
(0.03
|
)
|
(0.01
|
)
|
||||||
Total fuel expense
|
$
|
4,195
|
|
$
|
3,169
|
|
$
|
1,026
|
|
$
|
2.10
|
|
$
|
1.61
|
|
$
|
0.49
|
|
MTM adjustments and settlements
(2)
|
4
|
|
136
|
|
(132
|
)
|
—
|
|
0.07
|
|
(0.07
|
)
|
||||||
Total fuel expense, adjusted
|
$
|
4,199
|
|
$
|
3,305
|
|
$
|
894
|
|
$
|
2.10
|
|
$
|
1.68
|
|
$
|
0.42
|
|
(1)
|
Market price for jet fuel at airport locations, including related taxes and transportation costs.
|
(2)
|
MTM adjustments and settlements include the effects of the derivative transactions discussed in
Note 5
of the Notes to the Condensed Consolidated Financial Statements. For additional information and the reason for adjusting fuel expense, see "Supplemental Information" below.
|
Non-Operating Results
|
Three Months Ended June 30,
|
|
|
Six Months Ended June 30,
|
|
||||||||||||||
(in millions)
|
2018
|
2017
|
Favorable (Unfavorable)
|
|
2018
|
2017
|
Favorable (Unfavorable)
|
||||||||||||
Interest expense, net
|
$
|
(89
|
)
|
$
|
(103
|
)
|
$
|
14
|
|
|
$
|
(191
|
)
|
$
|
(197
|
)
|
$
|
6
|
|
Unrealized gain/(loss) on investments, net
|
(238
|
)
|
—
|
|
(238
|
)
|
|
(220
|
)
|
—
|
|
(220
|
)
|
||||||
Miscellaneous, net
|
19
|
|
(48
|
)
|
67
|
|
|
(19
|
)
|
(104
|
)
|
85
|
|
||||||
Total non-operating expense, net
|
$
|
(308
|
)
|
$
|
(151
|
)
|
$
|
(157
|
)
|
|
$
|
(430
|
)
|
$
|
(301
|
)
|
$
|
(129
|
)
|
|
Three Months Ended June 30,
|
% Increase
(Decrease)
|
Six Months Ended June 30,
|
% Increase
(Decrease)
|
||||||||||||
Consolidated
(1)
|
2018
|
2017
|
2018
|
2017
|
||||||||||||
Revenue passenger miles (in millions)
|
59,406
|
|
57,575
|
|
3.2
|
%
|
108,682
|
|
105,527
|
|
3.0
|
%
|
||||
Available seat miles (in millions)
|
68,514
|
|
66,227
|
|
3.5
|
%
|
127,967
|
|
124,098
|
|
3.1
|
%
|
||||
Passenger mile yield
|
|
17.75
|
¢
|
|
16.97
|
¢
|
4.6
|
%
|
|
17.77
|
¢
|
|
17.01
|
¢
|
4.5
|
%
|
PRASM
|
|
15.39
|
¢
|
|
14.75
|
¢
|
4.4
|
%
|
|
15.09
|
¢
|
|
14.46
|
¢
|
4.4
|
%
|
TRASM
|
|
17.19
|
¢
|
|
16.23
|
¢
|
5.9
|
%
|
|
16.99
|
¢
|
|
15.99
|
¢
|
6.3
|
%
|
TRASM, adjusted
(2)
|
|
16.87
|
¢
|
|
16.13
|
¢
|
4.6
|
%
|
|
16.66
|
¢
|
|
15.89
|
¢
|
4.8
|
%
|
CASM
|
|
14.73
|
¢
|
|
13.23
|
¢
|
11.3
|
%
|
|
15.02
|
¢
|
|
13.59
|
¢
|
10.5
|
%
|
CASM-Ex
(2)
|
|
10.02
|
¢
|
|
9.73
|
¢
|
2.9
|
%
|
|
10.52
|
¢
|
|
10.17
|
¢
|
3.4
|
%
|
Passenger load factor
|
86.7
|
%
|
86.9
|
%
|
(0.2
|
)%
|
84.9
|
%
|
85.0
|
%
|
(0.1
|
)%
|
||||
Fuel gallons consumed (in millions)
|
1,067
|
|
1,047
|
|
2.0
|
%
|
2,003
|
|
1,965
|
|
1.9
|
%
|
||||
Average price per fuel gallon
(3)
|
$
|
2.19
|
|
$
|
1.61
|
|
36.0
|
%
|
$
|
2.10
|
|
$
|
1.61
|
|
30.4
|
%
|
Average price per fuel gallon, adjusted
(3)(4)
|
$
|
2.17
|
|
$
|
1.66
|
|
30.7
|
%
|
$
|
2.10
|
|
$
|
1.68
|
|
24.7
|
%
|
(1)
|
Includes the operations of our regional carriers under capacity purchase agreements.
|
(2)
|
Non-GAAP financial measure defined and reconciled to TRASM and CASM, respectively, in "Supplemental Information" below.
|
(3)
|
Includes the impact of fuel hedge activity and refinery segment results.
|
(4)
|
Non-GAAP financial measure defined and reconciled to average fuel price per gallon in "Results of Operations" for the
three and six months ended
June 30, 2018
and
2017
.
|
|
Current Fleet
(1)
|
|
Commitments
(1)
|
||||||||||
Aircraft Type
|
Owned
|
Capital Lease
|
Operating Lease
|
Total
|
Average Age
|
Purchase
|
Options
|
||||||
B-717-200
|
3
|
|
14
|
|
74
|
|
91
|
|
16.8
|
—
|
|
—
|
|
B-737-700
|
10
|
|
—
|
|
—
|
|
10
|
|
9.4
|
—
|
|
—
|
|
B-737-800
|
73
|
|
4
|
|
—
|
|
77
|
|
16.8
|
—
|
|
—
|
|
B-737-900ER
|
63
|
|
—
|
|
37
|
|
100
|
|
2.5
|
30
|
|
—
|
|
B-757-200
|
89
|
|
8
|
|
3
|
|
100
|
|
20.9
|
—
|
|
—
|
|
B-757-300
|
16
|
|
—
|
|
—
|
|
16
|
|
15.4
|
—
|
|
—
|
|
B-767-300
|
2
|
|
—
|
|
—
|
|
2
|
|
25.0
|
—
|
|
—
|
|
B-767-300ER
|
54
|
|
2
|
|
—
|
|
56
|
|
22.1
|
—
|
|
—
|
|
B-767-400ER
|
21
|
|
—
|
|
—
|
|
21
|
|
17.5
|
—
|
|
—
|
|
B-777-200ER
|
8
|
|
—
|
|
—
|
|
8
|
|
18.6
|
—
|
|
—
|
|
B-777-200LR
|
10
|
|
—
|
|
—
|
|
10
|
|
9.3
|
—
|
|
—
|
|
A220-100 (formerly called CS100)
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
75
|
|
50
|
|
A319-100
|
55
|
|
—
|
|
2
|
|
57
|
|
16.3
|
—
|
|
—
|
|
A320-200
|
55
|
|
3
|
|
4
|
|
62
|
|
22.9
|
—
|
|
—
|
|
A321-200
|
29
|
|
—
|
|
27
|
|
56
|
|
0.9
|
71
|
|
—
|
|
A321-200neo
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
100
|
|
100
|
|
A330-200
|
11
|
|
—
|
|
—
|
|
11
|
|
13.3
|
—
|
|
—
|
|
A330-300
|
28
|
|
—
|
|
3
|
|
31
|
|
9.5
|
—
|
|
—
|
|
A330-900neo
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
25
|
|
—
|
|
A350-900
|
11
|
|
—
|
|
—
|
|
11
|
|
0.5
|
14
|
|
—
|
|
MD-88
|
90
|
|
14
|
|
—
|
|
104
|
|
27.7
|
—
|
|
—
|
|
MD-90
|
53
|
|
—
|
|
—
|
|
53
|
|
21.3
|
—
|
|
—
|
|
Total
|
681
|
|
45
|
|
150
|
|
876
|
|
16.3
|
315
|
|
150
|
|
(1)
|
Excludes certain aircraft we own, lease or have committed to purchase that are operated by regional carriers on our behalf shown in the table below.
|
|
Fleet Type
|
|
||||||||||
Carrier
|
CRJ-200
|
CRJ-700
|
CRJ-900
(3)
|
Embraer 170
|
Embraer 175
|
Total
|
||||||
Endeavor Air, Inc.
(1)
|
43
|
|
3
|
|
109
|
|
—
|
|
—
|
|
155
|
|
ExpressJet Airlines, Inc.
(2)
|
—
|
|
21
|
|
—
|
|
—
|
|
—
|
|
21
|
|
SkyWest Airlines, Inc.
|
85
|
|
27
|
|
36
|
|
—
|
|
28
|
|
176
|
|
Compass Airlines, Inc.
|
—
|
|
—
|
|
—
|
|
—
|
|
36
|
|
36
|
|
Republic Airline, Inc.
|
—
|
|
—
|
|
—
|
|
20
|
|
16
|
|
36
|
|
GoJet Airlines, LLC
|
—
|
|
22
|
|
7
|
|
—
|
|
—
|
|
29
|
|
Total
|
128
|
|
73
|
|
152
|
|
20
|
|
80
|
|
453
|
|
(1)
|
Endeavor Air, Inc. is a wholly owned subsidiary of Delta.
|
(2)
|
During 2017, we and ExpressJet Airlines, Inc. agreed to terminate our relationship by the end of 2018.
|
(3)
|
In June 2018, we signed an agreement with Bombardier Commercial Aircraft to purchase 20 CRJ-900 aircraft, which are not included in the table above. These aircraft will be operated by a Delta Connection carrier, and will replace older dual-class aircraft that they own or lease. The new aircraft will be delivered beginning in late 2018 with the last delivery to occur in 2020.
|
|
Three Months Ended June 30,
|
|||||
(in millions)
|
2018
|
2017
|
||||
Pre-tax income
|
$
|
1,372
|
|
$
|
1,831
|
|
Adjusted for:
|
|
|
||||
MTM adjustments and settlements
|
24
|
|
(52
|
)
|
||
Equity investment MTM adjustments
|
(22
|
)
|
15
|
|
||
Unrealized gain/loss on investments
|
238
|
|
—
|
|
||
Pre-tax income, adjusted for special items
|
$
|
1,612
|
|
$
|
1,795
|
|
•
|
Third-party refinery sales.
We adjust TRASM for refinery sales to third parties to determine TRASM, adjusted because these revenues are not related to our airline segment. TRASM, adjusted therefore provides a more meaningful comparison of revenue from our airline operations to the rest of the airline industry.
|
|
Three Months Ended June 30,
|
|
Six Months Ended June 30,
|
||||||||||
|
2018
|
2017
|
|
2018
|
2017
|
||||||||
TRASM
|
|
17.19
|
¢
|
|
16.23
|
¢
|
|
|
16.99
|
¢
|
|
15.99
|
¢
|
Adjusted for:
|
|
|
|
|
|
||||||||
Third-party refinery sales
|
(0.32
|
)
|
(0.10
|
)
|
|
(0.33
|
)
|
(0.11
|
)
|
||||
TRASM, adjusted
|
|
16.87
|
¢
|
|
16.13
|
¢
|
|
|
16.66
|
¢
|
|
15.89
|
¢
|
•
|
Aircraft fuel and related taxes.
The volatility in fuel prices impacts the comparability of year-over-year financial performance. The adjustment for aircraft fuel and related taxes allows investors to better understand and analyze our non-fuel costs and year-over-year financial performance.
|
•
|
Ancillary businesses and refinery.
These expenses include aircraft maintenance and staffing services we provide to third parties, our vacation wholesale operations and refinery cost of sales to third parties. Because these businesses are not related to the generation of a seat mile, we adjust for the costs related to these sales to provide a more meaningful comparison of the costs of our airline operations to the rest of the airline industry.
|
•
|
Profit sharing.
We adjust for profit sharing because this adjustment allows investors to better understand and analyze our recurring cost performance and provides a more meaningful comparison of our core operating costs to the airline industry.
|
|
Three Months Ended June 30,
|
|
Six Months Ended June 30,
|
||||||||||
|
2018
|
2017
|
|
2018
|
2017
|
||||||||
CASM
|
|
14.73
|
¢
|
|
13.23
|
¢
|
|
|
15.02
|
¢
|
|
13.59
|
¢
|
Adjusted for:
|
|
|
|
|
|
||||||||
Aircraft fuel and related taxes
|
(3.41
|
)
|
(2.55
|
)
|
|
(3.28
|
)
|
(2.55
|
)
|
||||
Ancillary businesses and refinery
|
(0.72
|
)
|
(0.44
|
)
|
|
(0.76
|
)
|
(0.48
|
)
|
||||
Profit sharing
|
(0.58
|
)
|
(0.51
|
)
|
|
(0.46
|
)
|
(0.39
|
)
|
||||
CASM-Ex
|
|
10.02
|
¢
|
|
9.73
|
¢
|
|
|
10.52
|
¢
|
|
10.17
|
¢
|
Period
|
Total Number of Shares Purchased
|
Average Price Paid Per Share
|
Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs
|
Approximate Dollar Value (in millions) of Shares That May
Yet be Purchased Under the
Plan or Programs
|
|||||||
April 2018
|
2,148,886
|
|
$
|
54.38
|
|
2,148,886
|
|
|
$
|
4,225
|
|
May 2018
|
3,956,438
|
|
$
|
52.96
|
|
3,956,438
|
|
|
$
|
4,025
|
|
June 2018
|
5,120,490
|
|
$
|
53.78
|
|
5,120,490
|
|
|
$
|
3,750
|
|
Total
|
11,225,814
|
|
|
11,225,814
|
|
|
|
10.1
|
10.2
|
15
|
31.1
|
31.2
|
32
|
101.INS
|
XBRL Instance Document - The instance document does not appear in the interactive data file because its XBRL tags are embedded within the inline XBRL document.
|
101.SCH
|
XBRL Taxonomy Extension Schema Document
|
101.CAL
|
XBRL Taxonomy Extension Calculation Linkbase Document
|
101.DEF
|
XBRL Taxonomy Extension Definition Linkbase Document
|
101.LAB
|
XBRL Taxonomy Extension Labels Linkbase Document
|
101.PRE
|
XBRL Taxonomy Extension Presentation Linkbase Document
|
|
Delta Air Lines, Inc.
|
|
(Registrant)
|
|
|
|
/s/ Craig M. Meynard
|
|
Craig M. Meynard
|
|
Vice President and Chief Accounting Officer
|
|
(Principal Accounting Officer)
|
July 12, 2018
|
|
1 Year Delta Air Lines Chart |
1 Month Delta Air Lines Chart |
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