Delta Air Lines Announces December Quarter and Full Year 2023 Financial Results

January 12, 2024

Delivered industry-leading operational performance and financial results in December quarter 

Generated record full year revenue and over $5 billion of pre-tax income, a near doubling over 2022

Guiding to 2024 free cash flow of $3 to $4 billion, an improvement of up to $2 billion over 2023

Expect record March quarter revenue on improving domestic environment and continued strength in  international demand, with solid profitability

ATLANTA, Jan. 12, 2024 /PRNewswire/ -- Delta Air Lines (NYSE: DAL) today reported financial results for the December quarter and full year 2023 and provided its outlook for the March quarter and full year 2024.  Highlights of the December quarter and full year 2023, including both GAAP and adjusted metrics, are on page six and incorporated here.

"2023 was a great year for Delta with industry-leading operational and financial performance.  Our people and their commitment to deliver unmatched service excellence for our customers is at the foundation of Delta's success.  We are thrilled to recognize their outstanding work with $1.4 billion in profit sharing payments next month," said Ed Bastian, Delta's chief executive officer.  "In 2024, demand for air travel remains strong and our customer base is in a healthy financial position with travel a top priority.  We expect to grow full year earnings to $6 to $7 per share and generate free cash flow of $3 to $4 billion, further strengthening our financial foundation."

December Quarter 2023 GAAP Financial Results

  • Operating revenue of $14.2 billion
  • Operating income of $1.3 billion with an operating margin of 9.3 percent
  • Pre-tax income of $2.3 billion with a pre-tax margin of 16.0 percent
  • Earnings per share of $3.16
  • Operating cash flow of $545 million
  • Payments on debt and finance lease obligations of $361 million

December Quarter 2023 Adjusted Financial Results

  • Operating revenue of $13.7 billion, 11 percent higher than the December quarter 2022
  • Operating income of $1.3 billion with an operating margin of 9.7 percent
  • Pre-tax income of $1.1 billion with a pre-tax margin of 7.8 percent
  • Earnings per share of $1.28
  • Operating cash flow of $499 million

Full Year 2023 GAAP Financial Results

  • Operating revenue of $58.0 billion
  • Operating income of $5.5 billion with an operating margin of 9.5 percent
  • Pre-tax income of $5.6 billion with a pre-tax margin of 9.7 percent
  • Earnings per share of $7.17
  • Operating cash flow of $6.5 billion
  • Payments on debt and finance lease obligations of $4.1 billion
  • Total debt and finance lease obligations of $20.1 billion at year end

Full Year 2023 Adjusted Financial Results

  • Operating revenue of $54.7 billion, 20 percent higher than the full year 2022
  • Operating income of $6.3 billion with an operating margin of 11.6 percent
  • Pre-tax income of $5.2 billion with a pre-tax margin of 9.5 percent
  • Earnings per share of $6.25
  • Operating cash flow of $7.2 billion
  • Free cash flow of $2.0 billion
  • Adjusted debt to EBITDAR of 3.0x, down from 5.0x at the end of 2022
  • Return on invested capital of 13.4 percent, up 5 points over 2022

Financial Guidance1 


FY 2024 Forecast

Earnings Per Share

$6 - $7

Free Cash Flow ($B)

$3 - $4

Adjusted Debt to EBITDAR

2x - 3x




1Q24 Forecast

Total Revenue YoY

Up 3% - 6%

Operating Margin

Approx. 5%

Earnings Per Share

$0.25 - $0.50


1Non-GAAP measures; Refer to Non-GAAP reconciliations for historical comparison figures

Additional metrics for financial modeling can be found in the Supplemental Information section under Quarterly Results on ir.delta.com.

Revenue Environment and Outlook

"With industry-leading operational performance and best-in-class service delivered by our people, more customers than ever are choosing Delta.  In 2023 we delivered a record $54.7 billion in revenue, 20 percent higher than 2022.    Premium and non-ticket revenue has reached 55 percent of total revenue, supporting Delta's differentiated financial results from the industry," said Glen Hauenstein, Delta's president.  "With strong demand for international travel and a positive inflection in the domestic environment, we expect March quarter adjusted revenue to be 3 to 6 percent higher than the prior year."

"With our outlook for continued revenue growth, we expect March quarter unit revenues to be flat to down 3 percent over 2023," Glen said.  "The midpoint of this outlook implies a two-point sequential improvement in unit revenues on a year-over-year basis.  The March quarter includes a headwind from higher international mix, the normalization of travel credit utilization and lapping a competitor's operational challenges in the year ago period."

  • Industry-leading operational results with strong leisure and business demand continuing: Delta delivered record December quarter revenue with the highest holiday travel volumes in its history. Operational performance was best-in-class with leading system-wide completion factor and on-time performance. Corporate sales accelerated into year end, including double-digit year-over-year growth in the month of December. Technology and Financial Services led momentum for the December quarter, with Media and Auto sectors seeing notable traction following strike resolutions. Recent corporate survey results indicate that 93 percent of companies surveyed expect their travel volumes to increase sequentially or stay the same in the March quarter and into 2024.
  • International demand remains strong: International passenger revenue was 25 percent higher versus the December quarter 2022 with double-digit revenue and capacity growth in the Transatlantic, Pacific and Latin entities. Transatlantic performance led with passenger unit revenues up 9 percent versus the December quarter 2022. Full year results generated record margins across all three international regions.
  • Premium and Loyalty driving revenue diversification: Premium revenue grew 15 percent versus the December quarter 2022 on record paid load factors, outperforming Main Cabin. Loyalty revenue improved 11 percent, driven by strong co-brand spend growth. Remuneration from American Express for the December quarter was $1.7 billion, approximately 11 percent higher than the December quarter 2022, and full year remuneration of $6.8 billion grew 22 percent year-over-year. For the full year, diversified revenue streams, including Loyalty, Premium, Cargo, and MRO comprised 55 percent of total revenues.

Cost Performance and Outlook

"We closed the year strong, with full-year operating margin expanding by four points to 11.6 percent." said Dan Janki, Delta's chief financial officer.  "In 2024 we are entering a period of optimization and expect to unlock efficiencies that will fund continued investment in our people, our operation and our customers.  We expect to deliver earnings and cash flow growth for the full year, with non-fuel unit costs up low-single digits over 2023."

December Quarter 2023 Cost Performance

  • Operating expense of $12.9 billion and adjusted operating expense of $12.3 billion
  • Adjusted non-fuel costs of $9.1 billion
  • Non-fuel CASM was 1.1 percent higher year-over-year
  • Adjusted fuel expense of $2.9 billion was up 6 percent year-over-year
  • Adjusted fuel price of $3.00 per gallon declined 6 percent year-over-year with a breakeven refinery contribution following the planned maintenance at the refinery facilities
  • Fuel efficiency, defined as gallons per 1,000 ASMs, was 14.3, a 2 percent improvement year-over-year

Full Year 2023 Cost Performance

  • Operating expense of $52.5 billion and adjusted operating expense of $48.3 billion
  • Adjusted non-fuel costs of $35.8 billion
  • Non-fuel CASM was 2.3 percent higher year-over-year
  • Adjusted fuel expense of $11.1 billion was down 3 percent year-over-year
  • Adjusted fuel price of $2.83 per gallon declined 16 percent year-over-year and includes a refinery benefit of 10¢ per gallon
  • Fuel efficiency, defined as gallons per 1,000 ASMs, was 14.4, a 1.4 percent improvement year-over-year

Balance Sheet, Cash and Liquidity

"Delta delivered $2 billion of free cash flow in the year, while reinvesting in the business and repaying $4.1 billion of gross debt.  During the year, we reduced leverage to 3x and reinstated the quarterly dividend," Janki said.  "We expect 2024 free cash flow of $3 to $4 billion, an up to $2 billion improvement driven by continued earnings growth, lower capital expenditures and a higher mix of cash sales.  With strong cash generation, we expect to continue reducing debt and growing our unencumbered asset base, progressing our balance sheet towards investment grade."

  • Adjusted net debt of $21.4 billion at December quarter end, a reduction of $879 million from the end of 2022
  • Payments on debt and finance lease obligations for the full year of $4.1 billion
  • Weighted average interest rate of 4.6 percent with 90 percent fixed rate debt and 10 percent variable rate debt
  • Borrowed $878 million in connection with tax-exempt bond financing to provide a majority of funding to complete the generational terminal transformation at LaGuardia airport
  • Adjusted operating cash flow in the December quarter of $499 million and gross capital expenditures of $1.2 billion
  • Full year adjusted operating cash flow of $7.2 billion and gross capital expenditures of $5.3 billion, resulting in $2.0 billion free cash flow
  • Air Traffic Liability ended the year at $7.0 billion
  • Liquidity* of $6.8 billion at year-end, including $2.9 billion in undrawn revolver capacity

*Includes cash and cash equivalents, short-term investments and undrawn revolving credit facilities

Fleet Update

Today, Delta announced it reached an agreement with Airbus to purchase twenty A350-1000s, with options for twenty additional widebody aircraft.  Deliveries of the aircraft are scheduled to begin in 2026.  In addition to improved fuel efficiency, these aircraft will add higher gauge, more premium seating and greater cargo capabilities to the international widebody fleet.  The company also announced a service agreement with Rolls Royce to service its Trent XWB-97 engines.  The order for the aircraft is within Delta's previously announced capital expenditure and capacity targets.

December Quarter and Full Year 2023 Highlights

Operations, Network and Fleet

  • Earned the Cirium Platinum Award for operational excellence for the third consecutive year, and named the most on-time airline in North America, a demonstration of Delta's commitment to operational performance and minimizing passenger disruption
  • Operated the most reliable airline during the quarter1 with a completion factor of 99.8%, and for the full year, Delta's network system ranked first among competitors in on-time arrivals2
  • Took delivery of 15 aircraft in the December quarter, bringing full year aircraft deliveries to 43, including 27 A321neo, 9 A220-300 and 7 A330-900 aircraft
  • Building on Delta's partnership with LATAM, launched new and returning service to Rio de Janeiro from Delta's Atlanta and New York-JFK hubs
  • Announced daily nonstop service from Seattle to Taipei beginning June 2024
  • Launched a long-term codeshare agreement with EL AL Israel airlines in December with travel beginning January 1st, improving connection for customers flying between the Americas and Tel-Aviv
  • Announced the launch of Delta's codeshare relationship with airBaltic, providing customers with convenient connections and more flexible booking options between North America and Latvia

Culture and People

  • Delta people earned $1.4 billion in profit sharing and $53 million in Shared Rewards for the year, recognizing the outstanding performance of Delta's 100,000 employees
  • Delta ranked No. 13 in the U.S. on Glassdoor's Best Places to Work list, the 8th year in a row the company has been named a Best Place to Work by Glassdoor
  • Delta volunteers helped build four Habitat for Humanity homes, bringing the total built or rehabbed by Delta to 283 across 13 countries
  • Building on Delta's Propel Program designed to develop the next generation of pilots, welcomed 61 employees to the program in the year
  • Delta celebrated 19 years in partnership with Marine Toys for Tots, presenting over 1,200 bikes, 1,200 toys and a $50,000 contribution to the organization at its annual holiday event at Delta TechOps. Delta has contributed $700,000 annually to Toys for Tots system wide.

Customer Experience and Loyalty

  • Engagement with Delta and the SkyMiles program reached an all-time high, with record membership growth, co-brand spend and revenue from travel-adjacent services
  • Named the No. 1 airline in the Business Travel News Airline survey for the 13th consecutive year, citing Delta's customer service, distribution channels, expansive network and quality of communications
  • Delta's LAX Sky Club was named North America's Best Airline Lounge for 2023 by Business Traveler
  • Added Walmart+ to the Delta Sync suite of partners to offer customers the power and convenience of shopping from the air
  • Opened the Window Seat Shop at JFK during the holiday season, where SkyMiles members can shop artisan gifts from small businesses across Delta's global network while earning Medallion Qualification Dollars (MQDs) toward 2025 status
  • The Fly Delta App crossed 1 billion in annual visits in 2023, up 25% year-over-year

Environmental, Social and Governance

  • Improved fuel efficiency through fleet renewal and saved more than 8 million gallons of fuel year-over-year through other cross-divisional efforts, coordinated through Delta's Carbon Council. Initiatives include catering service weight reduction and enhanced aircraft routing
  • Delta retired the CRJ-200, its least fuel-efficient aircraft type, making Delta the only major U.S. airline with premium seating on every flight
  • Began final testing of paper cups onboard, with the opportunity to eliminate nearly seven million pounds of single-use plastics onboard annually once fully implemented system wide
  • Recognized by Forbes in three of its annual lists of America's Best Employers for Women, America's Best Employers for Veterans and America's Best Employers for Diversity
  • Identified by Newsweek as one of America's Greatest Workplaces for LGBTQ+ and for Veterans
  • Delta led the formation of Americans for Clean Aviation Fuels, a coalition of the largest industrial sectors in America focused on promoting the economic benefits of building a robust market for Sustainable Aviation Fuel (SAF)
  • Delta continues to make progress increasing representation of women, Black talent and Latin and Hispanic talent in management roles across the company, as outlined in the 2023 Close the Gap update

1FlightStats preliminary data for Delta flights system wide and for Delta's competitive set (AA, UA, B6, AS, WN, and DL), from October 1 - December 31, 2023.

2FlightStats preliminary data for Delta flights system wide and for Delta's competitive set (AA, UA, B6, AS, WN, and DL), from January 1 - December 31, 2023. On-time is defined as A0.

December Quarter and Full Year 2023 Results

December quarter and full year results have been adjusted primarily for the third-party refinery sales, unrealized gains on investments, one-time expenses related to the new pilot agreement and loss on extinguishment of debt as described in the reconciliations in Note A.


GAAP

Adjusted

GAAP

Adjusted

($ in millions except per share and unit costs)

4Q23

4Q22

4Q23

4Q22

FY23

FY22

FY23

FY22

Operating income

1,323

1,470

1,330

1,422

5,521

3,661

6,334

3,566

Operating margin

9.3 %

10.9 %

9.7 %

11.6 %

9.5 %

7.2 %

11.6 %

7.8 %

Pre-tax income

2,275

1,120

1,064

1,242

5,608

1,914

5,220

2,703

Pre-tax margin

16.0 %

8.3 %

7.8 %

10.1 %

9.7 %

3.8 %

9.5 %

5.9 %

Net income

2,037

828

826

950

4,609

1,318

4,020

2,053

Diluted earnings per share

3.16

1.29

1.28

1.48

7.17

2.06

6.25

3.20

Operating revenue

14,223

13,435

13,661

12,292

58,048

50,582

54,669

45,605

Total revenue per available seat mile (TRASM) (cents)

20.78

22.58

19.95

20.66

21.34

21.69

20.10

19.55

Operating expense

12,900

11,965

12,330

10,871

52,527

46,921

48,335

42,039

Cost per available seat mile (CASM) (cents)

18.84

20.11

13.29

13.14

19.31

20.12

13.17

12.87

Fuel expense

2,941

2,849

2,933

2,778

11,069

11,482

11,121

11,453

Average fuel price per gallon

3.01

3.28

3.00

3.20

2.82

3.36

2.83

3.36

Operating cash flow

545

1,189

499

1,211

6,464

6,363

7,216

6,210

Capital expenditures

1,602

2,200

1,201

2,113

5,323

6,366

5,305

6,008

Total debt and finance lease obligations

20,054

23,030



20,054

23,030



Adjusted net debt



21,424

22,303



21,424

22,303

About Delta Air Lines  Through the warmth and service of Delta Air Lines (NYSE: DAL) people and the power of innovation, Delta never stops looking for ways to make every trip feel tailored to every customer.  100,000 Delta people lead the way in delivering a world-class customer experience on over 4,000 daily flights to more than 280 destinations on six continents, connecting people to places and to each other.

Delta served more than 190 million customers in 2023 -- safely, reliably and with industry-leading customer service innovation – and was again recognized as North America's most on-time airline.  We remain committed to ensuring that the future of travel is connected, personalized and enjoyable. Our people's genuine and enduring motivation is to make every customer feel welcomed and respected across every point of their journey with us.

Headquartered in Atlanta, Delta operates significant hubs and key markets in Amsterdam, Atlanta, Bogota, Boston, Detroit, Lima, London-Heathrow, Los Angeles, Mexico City, Minneapolis-St. Paul, New York-JFK and LaGuardia, Paris-Charles de Gaulle, Salt Lake City, Santiago (Chile), Sao Paulo, Seattle, Seoul-Incheon and Tokyo. 

As the leading global airline, Delta's mission to connect the world creates opportunities, fosters understanding and expands horizons by connecting people and communities to each other and to their own potential. 

Powered by innovative and strategic partnerships with Aeromexico, Air France-KLM, China Eastern, Korean Air, LATAM, Virgin Atlantic and WestJet, Delta brings more choice and competition to customers worldwide.  Delta's premium product line is elevated by its unique partnership with Wheels Up Experience.

Delta is America's most-awarded airline thanks to the dedication, passion and professionalism of its people.  It has been recognized by Cirium for operational excellence, as the top U.S. airline by the Wall Street Journal, among Fast Company's most innovative companies, the World's Most Admired Airline according to Fortune, as one of Glassdoor's Best Places to Work, and a top employer for diversity, veterans and best workplaces for women by Forbes.

Forward Looking Statements

Statements made in this press release that are not historical facts, including statements regarding our estimates, expectations, beliefs, intentions, projections, goals, aspirations, commitments or strategies for the future, should be considered "forward-looking statements" under the Securities Act of 1933, as amended, the Securities Exchange Act of 1934, as amended, and the Private Securities Litigation Reform Act of 1995. Such statements are not guarantees or promised outcomes and should not be construed as such. All forward-looking statements involve a number of risks and uncertainties that could cause actual results to differ materially from the estimates, expectations, beliefs, intentions, projections, goals, aspirations, commitments and strategies reflected in or suggested by the forward-looking statements. These risks and uncertainties include, but are not limited to, the impact of incurring significant debt in response to the COVID-19 pandemic; failure to comply with the financial and other covenants in our financing agreements; the possible effects of accidents involving our aircraft or aircraft of our airline partners; breaches or lapses in the security of technology systems on which we rely, which could compromise the data stored within them, as well as failure to comply with ever-evolving global privacy and security regulatory obligations or adequately address increasing customer focus on privacy issues and data security; disruptions in our information technology infrastructure; our dependence on technology in our operations; our commercial relationships with airlines in other parts of the world and the investments we have in certain of those airlines; the effects of a significant disruption in the operations or performance of third parties on which we rely; failure to realize the full value of intangible or long-lived assets; labor issues; the effects on our business of seasonality and other factors beyond our control, including severe weather conditions, natural disasters or other environmental events, including from the impact of climate change; changes in the cost of aircraft fuel; extended disruptions in the supply of aircraft fuel, including from Monroe Energy, LLC ("Monroe"), a wholly-owned subsidiary of Delta; failure or inability of insurance to cover a significant liability at Monroe's Trainer refinery; failure to comply with existing and future environmental regulations to which Monroe's refinery operations are subject, including costs related to compliance with renewable fuel standard regulations; significant damage to our reputation and brand, including from exposure to significant adverse publicity or inability to achieve certain sustainability goals; our ability to retain senior management and other key employees, and to maintain our company culture; disease outbreaks, such as the COVID-19 pandemic or similar public health threats, and measures implemented to combat them; the effects of terrorist attacks, geopolitical conflict or security events; competitive conditions in the airline industry; extended interruptions or disruptions in service at major airports at which we operate or significant problems associated with types of aircraft or engines we operate; the effects of extensive government regulation we are subject to; the impact of environmental regulation, including but not limited to increased regulation to reduce emissions and other risks associated with climate change, and the cost of compliance with more stringent environmental regulations; and unfavorable economic or political conditions in the markets in which we operate or volatility in currency exchange rates.

Additional information concerning risks and uncertainties that could cause differences between actual results and forward-looking statements is contained in our Securities and Exchange Commission filings, including our Annual Report on Form 10-K for the fiscal year ended December 31, 2022. Caution should be taken not to place undue reliance on our forward-looking statements, which represent our views only as of the date of this press release, and which we undertake no obligation to update except to the extent required by law.

 

DELTA AIR LINES, INC.

Consolidated Statements of Operations

(Unaudited)












Three Months Ended




Year Ended




December 31,




December 31,



(in millions, except per share data)

2023

2022

$ Change

% Change


2023

2022

$ Change

% Change

Operating Revenue:










Passenger

$      12,174

$      10,889

$        1,285

12 %


$     48,909

$     40,218

$       8,691

22 %

Cargo

188

248

(60)

(24) %


723

1,050

(327)

(31) %

Other

1,861

2,298

(437)

(19) %


8,416

9,314

(898)

(10) %

  Total operating revenue

14,223

13,435

788

6 %


58,048

50,582

7,466

15 %











Operating Expense:










Salaries and related costs

3,769

3,071

698

23 %


14,607

11,902

2,705

23 %

Aircraft fuel and related taxes

2,941

2,849

92

3 %


11,069

11,482

(413)

(4) %

Ancillary businesses and refinery

745

1,308

(563)

(43) %


4,172

5,756

(1,584)

(28) %

Contracted services

1,033

920

113

12 %


4,041

3,345

696

21 %

Landing fees and other rents

683

570

113

20 %


2,563

2,181

382

18 %

Aircraft maintenance materials and outside repairs

572

508

64

13 %


2,432

1,982

450

23 %

Depreciation and amortization

610

554

56

10 %


2,341

2,107

234

11 %

Passenger commissions and other selling expenses

563

507

56

11 %


2,334

1,891

443

23 %

Regional carrier expense

537

504

33

7 %


2,200

2,051

149

7 %

Passenger service

442

403

39

10 %


1,750

1,453

297

20 %

Profit sharing

299

272

27

10 %


1,383

563

820

NM

Pilot agreement and related expenses

— %


864

864

NM

Aircraft rent

137

128

9

7 %


532

508

24

5 %

Other

569

371

198

53 %


2,239

1,700

539

32 %

  Total operating expense

12,900

11,965

935

8 %


52,527

46,921

5,606

12 %











Operating Income

1,323

1,470

(147)

(10) %


5,521

3,661

1,860

51 %











Non-Operating Income/(Expense):










Interest expense, net

(207)

(238)

31

(13) %


(834)

(1,029)

195

(19) %

Gain/(loss) on investments, net

1,218

(170)

1,388

NM


1,263

(783)

2,046

NM

Loss on extinguishment of debt

— %


(63)

(100)

37

(37) %

Pension and related (expense)/benefit

(61)

74

(135)

NM


(244)

292

(536)

NM

Miscellaneous, net

2

(16)

18

NM


(35)

(127)

92

(72) %

  Total non-operating income/(expense), net

952

(350)

1,302

NM


87

(1,747)

1,834

NM











Income Before Income Taxes

2,275

1,120

1,155

NM


5,608

1,914

3,694

NM











Income Tax Provision

(238)

(292)

54

(18) %


(999)

(596)

(403)

68 %











Net Income

$        2,037

$           828

$        1,209

NM


$       4,609

$       1,318

$       3,291

NM











Basic Earnings Per Share

$          3.19

$          1.30




$         7.21

$         2.07



Diluted Earnings Per Share

$          3.16

$          1.29




$         7.17

$         2.06













Basic Weighted Average Shares Outstanding

639

638




639

638



Diluted Weighted Average Shares Outstanding

644

641




643

641



















 

DELTA AIR LINES, INC.

Passenger Revenue

(Unaudited)











Three Months Ended



Year Ended




December 31,



December 31,



(in millions)

2023

2022

$ Change

% Change


2023

2022

$ Change

% Change

Ticket - Main cabin

$       5,939

$       5,398

$          541

10 %


$     24,477

$     20,396

$       4,081

20 %

Ticket - Premium products

4,856

4,223

633

15 %


19,119

15,230

3,889

26 %

Loyalty travel awards

915

825

90

11 %


3,462

2,898

564

19 %

Travel-related services

464

443

21

5 %


1,851

1,694

157

9 %

Passenger revenue

$     12,174

$     10,889

$       1,285

12 %


$     48,909

$     40,218

$       8,691

22 %

 

DELTA AIR LINES, INC.

Other Revenue

(Unaudited)











Three Months Ended




Year Ended




December 31,




December 31,



(in millions)

2023

2022

$ Change

% Change


2023

2022

$ Change

% Change

Refinery

$          563

$       1,142

$        (579)

(51) %


$       3,379

$       4,977

$      (1,598)

(32) %

Loyalty program

802

720

82

11 %


3,093

2,597

496

19 %

Ancillary businesses

183

182

1

1 %


840

846

(6)

(1) %

Miscellaneous

313

254

59

23 %


1,104

894

210

23 %

Other revenue

$       1,861

$       2,298

$        (437)

(19) %


$       8,416

$       9,314

$        (898)

(10) %

 

DELTA AIR LINES, INC.

Total Revenue

(Unaudited)













Increase (Decrease)





4Q23 vs 4Q22

Revenue


4Q23 ($M)


Change

Unit Revenue

Yield

Capacity

Domestic

$

8,769


7 %

(4) %

(2) %

12 %

Atlantic


1,900


23 %

9 %

6 %

13 %

Latin America


952


18 %

(7) %

(7) %

28 %

Pacific


553


45 %

1 %

1 %

44 %

Passenger Revenue

$

12,174


12 %

(3) %

(2) %

15 %

Cargo Revenue


188


(24) %




Other Revenue


1,861


(19) %




Total Revenue

$

14,223


6 %

(8) %



       Third Party Refinery Sales


(563)






Total Revenue, adjusted

$

13,661


11 %

(3) %











 

DELTA AIR LINES, INC.

Statistical Summary

(Unaudited)



Three Months Ended




Year Ended




December 31,




December 31,




2023

2022

Change


2023

2022

Change

Revenue passenger miles (millions)

57,655

50,476

14

%


232,241

195,480

19

%

Available seat miles (millions)

68,462

59,506

15

%


272,033

233,226

17

%

Passenger mile yield (cents)

21.12

21.57

(2)

%


21.06

20.57

2

%

Passenger revenue per available seat mile (cents)

17.78

18.30

(3)

%


17.98

17.24

4

%

Total revenue per available seat mile (cents)

20.78

22.58

(8)

%


21.34

21.69

(2)

%

TRASM, adjusted - see Note A (cents)

19.95

20.66

(3)

%


20.10

19.55

3

%

Cost per available seat mile (cents)

18.84

20.11

(6)

%


19.31

20.12

(4)

%

CASM-Ex  - see Note A (cents)

13.29

13.14

1.1

%


13.17

12.87

2.3

%

Passenger load factor

84 %

85 %

(1)

pt


85 %

84 %

1

pt

Fuel gallons consumed (millions)

978

869

13

%


3,926

3,412

15

%

Average price per fuel gallon

$         3.01

$         3.28

(8)

%


$         2.82

$         3.36

(16)

%

Average price per fuel gallon, adjusted - see Note A

$         3.00

$         3.20

(6)

%


$         2.83

$         3.36

(16)

%

 

DELTA AIR LINES, INC.


Consolidated Statements of Cash Flows


(Unaudited)



Three Months Ended



December 31,


(in millions)

2023

2022


Cash Flows From Operating Activities:




Net Income

$                  2,037

$                    828


Depreciation and amortization

610

554


(Gain) loss on fair value investments

(1,220)

165


Changes in air traffic liability

(1,694)

(837)


Changes in profit sharing

299

272


Changes in balance sheet and other, net

513

207


     Net cash provided by operating activities

545

1,189






Cash Flows From Investing Activities:




Property and equipment additions:




Flight equipment, including advance payments

(1,085)

(1,643)


Ground property and equipment, including technology

(517)

(557)


Purchase of short-term investments

(2,129)


Redemption of short-term investments

1,060

221


Acquisition of strategic investments

(717)


Other, net

7

89


     Net cash used in investing activities

(535)

(4,736)






Cash Flows From Financing Activities:




Proceeds from long-term obligations

878


Payments on debt and finance lease obligations

(361)

(285)


Cash dividends

(64)


Other, net

(37)

(20)


     Net cash provided by/(used in) financing activities

416

(305)






Net Increase/(Decrease) in Cash, Cash Equivalents and Restricted Cash Equivalents

426

(3,852)


Cash, cash equivalents and restricted cash equivalents at beginning of period

2,969

7,325


Cash, cash equivalents and restricted cash equivalents at end of period

$                  3,395

$                  3,473






The following table provides a reconciliation of cash, cash equivalents and restricted cash reported within the Consolidated Balance Sheets to the total of the same
such amounts shown above:







Current assets:




     Cash and cash equivalents

$                  2,741

$                  3,266


     Restricted cash included in prepaid expenses and other

199

138


Other assets:




     Restricted cash included in other noncurrent assets

455

69


Total cash, cash equivalents and restricted cash equivalents

$                  3,395

$                  3,473






 






DELTA AIR LINES, INC.

Consolidated Balance Sheets

(Unaudited)








December 31,


December 31,

(in millions)

2023


2022

ASSETS

Current Assets:





Cash and cash equivalents

$                        2,741


$                        3,266


Short-term investments

1,127


3,268


Accounts receivable, net

3,130


3,176


Fuel inventory, expendable parts and supplies inventories, net

1,314


1,424


Prepaid expenses and other

1,847


1,877


     Total current assets

10,159


13,011






Property and Equipment, Net:





Property and equipment, net

35,486


33,109






Other Assets:





Operating lease right-of-use assets

6,926


7,036


Goodwill

9,753


9,753


Identifiable intangibles, net

5,983


5,992


Equity investments

3,457


2,128


Other noncurrent assets

1,734


1,259


     Total other assets

27,853


26,168

Total assets

$                      73,498


$                      72,288






LIABILITIES AND STOCKHOLDERS' EQUITY

Current Liabilities:





Current maturities of debt and finance leases

$                        2,983


$                        2,359


Current maturities of operating leases

746


714


Air traffic liability

7,044


8,160


Accounts payable

4,516


5,106


Accrued salaries and related benefits

4,564


3,288


Loyalty program deferred revenue

3,908


3,434


Fuel card obligation

1,100


1,100


Other accrued liabilities

1,616


1,779


     Total current liabilities

26,477


25,940






Noncurrent Liabilities:





Debt and finance leases

17,071


20,671


Pension, postretirement and related benefits

3,744


3,707


Loyalty program deferred revenue

4,512


4,448


Noncurrent operating leases

6,404


6,866


Deferred income taxes, net

874


24


Other noncurrent liabilities

3,440


4,050


     Total noncurrent liabilities

36,045


39,766






Commitments and Contingencies









Stockholders' Equity:

10,976


6,582

Total liabilities and stockholders' equity

$                      73,498


$                      72,288

 

Note A: The following tables show reconciliations of non-GAAP financial measures. The reasons Delta uses these measures are described below. Reconciliations may not calculate due to rounding. 

Delta sometimes uses information ("non-GAAP financial measures") that is derived from the Consolidated Financial Statements, but that is not presented in accordance with accounting principles generally accepted in the U.S. ("GAAP"). Under the Securities and Exchange Commission rules, non-GAAP financial measures may be considered in addition to results prepared in accordance with GAAP, but should not be considered a substitute for or superior to GAAP results. The tables below show reconciliations of non-GAAP financial measures used in this release to the most directly comparable GAAP financial measures.

Forward Looking Projections. Delta is not able to reconcile forward looking non-GAAP financial measures without unreasonable effort because the adjusting items such as those used in the reconciliations below will not be known until the end of the period and could be significant. 

Adjustments. These reconciliations include certain adjustments to GAAP measures that are made to provide comparability between the reported periods, if applicable, and for the reasons indicated below:

Third-party refinery sales. Refinery sales to third parties, and related expenses, are not related to our airline segment. Excluding these sales therefore provides a more meaningful comparison of our airline operations to the rest of the airline industry.

MTM adjustments and settlements on hedges. Mark-to-market ("MTM") adjustments are defined as fair value changes recorded in periods other than the settlement period. Such fair value changes are not necessarily indicative of the actual settlement value of the underlying hedge in the contract settlement period, and therefore we remove this impact to allow investors to better understand and analyze our core performance. Settlements represent cash received or paid on hedge contracts settled during the applicable period.

Restructuring charges. During 2020, we recorded restructuring charges for items such as fleet impairments and voluntary early retirement and separation programs following strategic business decisions in response to the COVID-19 pandemic. During 2022, we recognized adjustments to certain of those restructuring charges, representing changes in our estimates.

One-time pilot agreement expenses . In the March 2023 quarter, Delta pilots ratified a new four-year Pilot Working Agreement effective January 1, 2023. The agreement included a provision for a one-time payment made upon ratification in the March 2023 quarter of $735 million. Additionally, we recorded adjustments to other benefit-related items of approximately $130 million. Adjusting for these expenses allows investors to better understand and analyze our core cost performance.

MTM adjustments on investments. Unrealized gains/losses result from our equity investments that are accounted for at fair value in non-operating expense. The gains/losses are driven by changes in stock prices, foreign currency fluctuations and other valuation techniques for investments in certain companies, particularly those without publicly-traded shares. During the December 2023 quarter, Delta recorded an $848 million MTM gain from our investment in Wheels Up based on the closing price of its shares at the end of the quarter as traded on the New York Stock Exchange. Adjusting for these gains/losses allows investors to better understand and analyze our core operational performance in the periods shown.

Loss on extinguishment of debt. This adjustment relates to early termination of a portion of our debt. Adjusting for these losses allows investors to better understand and analyze our core operational performance in the periods shown.

Operating  Revenue, adjusted and Revenue Per Available Seat Mile ("TRASM"), adjusted 



Three Months Ended


4Q23 vs 4Q22
% Change

(in millions)

December 31, 2023

March 31, 2023

December 31, 2022


Operating revenue

$                    14,223

$                    12,759

$                    13,435



Adjusted for:






Third-party refinery sales

(563)

(916)

(1,142)



Operating revenue, adjusted

$                    13,661

$                    11,842

$                    12,292


11 %

 


Year Ended


% Change

(in millions)

December 31, 2023

December 31, 2022


Operating revenue

$                    58,048

$                    50,582



Adjusted for:





Third-party refinery sales

(3,379)

(4,977)



Operating revenue, adjusted

$                    54,669

$                    45,605


20 %

 


Three Months Ended


4Q23 vs 4Q22  
% Change


December 31, 2023

March 31, 2023

December 31, 2022


TRASM (cents)

20.78

20.80

22.58



Adjusted for:






Third-party refinery sales

(0.82)

(1.49)

(1.92)



TRASM, adjusted

19.95

19.30

20.66


(3) %

 


Year Ended


December 31, 2023

December 31, 2022

TRASM (cents)

21.34

21.69

Adjusted for:



Third-party refinery sales

(1.24)

(2.13)

TRASM, adjusted

20.10

19.55

 

Pre-Tax Income, Net Income, and Diluted Earnings per Share, adjusted



Three Months Ended


Three Months Ended


December 31, 2023


December 31, 2023


Pre-Tax

Income

Net


Earnings

(in millions, except per share data)

Income

Tax

Income


Per Diluted Share

GAAP

$              2,275

$               (238)

$              2,037


$                              3.16

Adjusted for:






MTM adjustments and settlements on hedges

7





MTM adjustments on investments

(1,218)





Non-GAAP

$              1,064

$               (238)

$                 826


$                              1.28








Three Months Ended


Three Months Ended


December 31, 2022


December 31, 2022


Pre-Tax

Income

Net


Earnings

(in millions, except per share data)

Income

Tax

Income


Per Diluted Share

GAAP

$              1,120

$               (292)

$                 828


$                              1.29

Adjusted for:






MTM adjustments and settlements on hedges

70





MTM adjustments on investments

170





Restructuring charges

(118)





Non-GAAP

$              1,242

$               (292)

$                 950


$                              1.48

 


Year Ended


Year Ended


December 31, 2023


December 31, 2023


Pre-Tax

Income

Net


Earnings

(in millions, except per share data)

Income

Tax

Income


Per Diluted Share

GAAP

$              5,608

$               (999)

$              4,609


$                              7.17

Adjusted for:






MTM adjustments and settlements on hedges

(52)





MTM adjustments on investments

(1,263)





Loss on extinguishment of debt

63





One-time pilot agreement expenses

864





Non-GAAP

$              5,220

$            (1,200)

$              4,020


$                              6.25








Year Ended


Year Ended


December 31, 2022


December 31, 2022


Pre-Tax

Income

Net


Earnings

(in millions, except per share data)

Income

Tax

Income


Per Diluted Share

GAAP

$              1,914

$               (596)

$              1,318


$                              2.06

Adjusted for:






MTM adjustments and settlements on hedges

29





MTM adjustments on investments

784





Loss on extinguishment of debt

100





Restructuring charges

(124)





Non-GAAP

$              2,703

$               (650)

$              2,053


$                              3.20

 

Free Cash Flow. We present free cash flow because management believes this metric is helpful to investors to evaluate the company's ability to generate cash that is available for use for debt service or general corporate initiatives. Free cash flow is also used internally as a component of our 2023 incentive compensation program. Free cash flow is defined as net cash from operating activities and net cash from investing activities, adjusted for (i) net redemptions of short-term investments, (ii) strategic investments and related, (iii) net cash flows related to certain airport construction projects and other, (iv) financed aircraft acquisitions and (v) pilot agreement payment. These adjustments are made for the following reasons:

Net redemptions of short-term investments. Net redemptions of short-term investments represent the net purchase and sale activity of investments and marketable securities in the period, including gains and losses. We adjust for this activity to provide investors a better understanding of the company's free cash flow generated by our operations.

Strategic investments and related. Certain cash flows related to our investments in and related transactions with other airlines and associated companies are included in our GAAP investing activities. We adjust for this activity because it provides a more meaningful comparison to our airline industry peers.

Net cash flows related to certain airport construction projects and other. Cash flows related to certain airport construction projects are included in our GAAP operating activities and capital expenditures. We have adjusted for these items, which were primarily funded by cash restricted for airport construction, to provide investors a better understanding of the company's free cash flow and capital expenditures that are core to our operations in the periods shown.

Financed aircraft acquisitions. This adjustment reflects aircraft deliveries that are leased as capital expenditures. The adjustment is based on their original contractual purchase price or an estimate of the aircraft's fair value and provides a more meaningful view of our investing activities.

Pilot agreement payment. In March 2023, Delta pilots ratified a new four-year Pilot Working Agreement effective January 1, 2023. The agreement includes a provision for a one-time payment upon ratification in the March 2023 quarter of $735 million. We adjust for this item to provide investors a better understanding of our recurring free cash flow generated by our operations.


Year Ended

(in millions)

December 31, 2023

Net cash provided by operating activities

$                      6,464

Net cash used in investing activities

(3,148)

Adjusted for:


Net redemptions of short-term investments

(2,235)

Strategic investments and related

152

Net cash flows related to certain airport construction projects and other

496

Financed aircraft acquisitions

(461)

Pilot agreement payment

735

Free cash flow

$                      2,003

 

Operating Income, adjusted



Three Months Ended

(in millions)

December 31, 2023

December 31, 2022

Operating income

$                      1,323

$                      1,470

Adjusted for:



MTM adjustments and settlements on hedges

7

70

Restructuring charges

(118)

Operating income, adjusted

$                      1,330

$                      1,422

 


Year Ended

(in millions)

December 31, 2023

December 31, 2022

Operating Income

$                      5,521

$                      3,661

Adjusted for:



MTM adjustments and settlements on hedges

(52)

29

One-time pilot agreement expenses

864

Restructuring charges

(124)

Operating income, adjusted

$                      6,334

$                      3,566

 

Operating Margin, adjusted



Three Months Ended


December 31, 2023

December 31, 2022

Operating margin

9.3 %

10.9 %

Adjusted for:



Third-party refinery sales

0.4

1.0

MTM adjustments and settlements on hedges

0.1

0.5

Restructuring charges

(0.9)

Operating margin, adjusted

9.7 %

11.6 %

 


Year Ended


December 31, 2023

December 31, 2022

Operating margin

9.5 %

7.2 %

Adjusted for:



Third-party refinery sales

0.7

0.8

MTM adjustments and settlements on hedges

(0.1)

0.1

One-time pilot agreement expenses

1.5

Restructuring charges

(0.2)

Operating margin, adjusted

11.6 %

7.8 %

 

Pre-Tax Margin, adjusted



Three Months Ended


December 31, 2023

December 31, 2022

Pre-tax margin

16.0 %

8.3 %

Adjusted for:



Third-party refinery sales

0.3

0.9

MTM adjustments and settlements on hedges

0.1

0.5

MTM adjustments on investments

(8.6)

1.3

Restructuring charges

(0.9)

Pre-tax margin, adjusted

7.8 %

10.1 %

 


Year Ended


December 31, 2023

December 31, 2022

Pre-tax margin

9.7 %

3.8 %

Adjusted for:



Third-party refinery sales

0.6

0.6

MTM adjustments and settlements on hedges

(0.1)

0.1

MTM adjustments on investments

(2.2)

1.5

Loss on extinguishment of debt

0.1

0.2

One-time pilot agreement expenses

1.5

Restructuring charges

(0.2)

Pre-tax margin, adjusted

9.5 %

5.9 %

 

Operating Cash Flow, adjusted. We present operating cash flow, adjusted because management believes adjusting for the following items provides a more meaningful measure for investors:

Net cash flows related to certain airport construction projects and other. Cash flows related to certain airport construction projects are included in our GAAP operating activities. We have adjusted for these items, which were primarily funded by cash restricted for airport construction, to provide investors a better understanding of the company's operating cash flow that is core to our operations in the periods shown.

Pilot agreement payment. In March 2023, Delta pilots ratified a new four-year Pilot Working Agreement effective January 1, 2023. The agreement includes a provision for a one-time payment upon ratification in the March 2023 quarter of $735 million. We adjust for this item to provide investors a better understanding of our recurring free cash flow generated by our operations.


Three Months Ended

(in millions)

December 31, 2023

December 31, 2022

Net cash provided by operating activities

$                         545

$                      1,189

Adjusted for:



Net cash flows related to certain airport construction projects and other

(45)

22

Net cash provided by operating activities, adjusted

$                         499

$                      1,211

 


Year Ended

(in millions)

December 31, 2023

December 31, 2022

Net cash provided by operating activities

$                      6,464

$                      6,363

Adjusted for:



Net cash flows related to certain airport construction projects and other

17

(154)

Pilot agreement payment

735

Net cash provided by operating activities, adjusted

$                      7,216

$                      6,210

 

Adjusted Debt to Earnings Before Interest, Taxes, Depreciation, Amortization and Rent ("EBITDAR"). We present adjusted debt to EBITDAR because management believes this metric is helpful to investors in assessing the company's overall debt profile. Adjusted debt includes LGA bonds and operating lease liabilities. We calculate EBITDAR by adding depreciation and amortization to GAAP operating income and adjusting for the fixed portion of operating lease expense.

(in billions)

December 31, 2023


December 31, 2022

Debt and finance lease obligations

$                                        20


$                                        23

Plus: Operating lease liability

7


8

Plus: Sale leaseback liability

2


2

Adjusted Debt

$                                        29


$                                        33

 


Year Ended

(in billions)

December 31, 2023


December 31, 2022

GAAP operating income

$                                          6


$                                          4

Adjusted for:




One-time pilot agreement expenses

1


Operating income, adjusted

6


4

Adjusted for:




Depreciation and amortization

2


2

Fixed portion of operating lease expense

1


1

EBITDAR

$                                        10


$                                          7





Adjusted Debt to EBITDAR

3.0x


5.0x

 

After-tax Return on Invested Capital ("ROIC"). We present after-tax return on invested capital as management believes this metric is helpful to investors in assessing the company's ability to generate returns using its invested capital as a measure against the industry. Return on invested capital is tax-effected adjusted total pre-tax income divided by average adjusted invested capital. Average adjusted invested capital represents the sum of the adjusted book value of equity at the end of the last five quarters, adjusted for pension impacts within other comprehensive income. Average adjusted gross debt is calculated using amounts as of the end of the last five quarters. All adjustments to calculate ROIC are intended to provide a more meaningful comparison of our results to the airline industry.


Year Ended

(in millions)

December 31, 2023

December 31, 2022

Pre-tax income

$                             5,608

$                             1,914

Adjusted for:



MTM adjustments and settlements on hedges

(52)

29

MTM adjustments on investments

(1,263)

784

Loss on extinguishment of debt

63

100

One-time pilot agreement expenses

864

Restructuring charges

(124)

Amortization of retirement actuarial loss

246

305

Interest expense, net and interest expense included in aircraft rent

1,176

1,366

Pre-tax adjusted income

$                             6,642

$                             4,374

Tax effect

(1,507)

(1,052)

Tax-effected adjusted total pre-tax income

$                             5,135

$                             3,322




Adjusted book value of equity

$                           14,606

$                           12,140

Average adjusted gross debt

23,636

27,493

Averaged adjusted invested capital

$                           38,242

$                           39,633




After-tax Return on Invested Capital

13.4 %

8.4 %

 

Operating revenue, adjusted related to premium products and diverse revenue streams



Year Ended

(in millions)

December 31, 2023

Operating revenue

$                        58,048

Adjusted for:


     Third-party refinery sales

(3,379)

Operating revenue, adjusted

$                        54,669

Less: main cabin revenue

(24,477)

Operating revenue, adjusted related to premium products and diverse revenue streams

$                        30,192

Percent of operating revenue, adjusted related to premium products and diverse revenue streams

55 %

 

Adjusted Non-Fuel Cost and Non-Fuel Unit Cost or Cost per Available Seat Mile, ("CASM-Ex")

We adjust operating expense and CASM for certain items described above, as well as the following items and reasons described below:

Aircraft fuel and related taxes. The volatility in fuel prices impacts the comparability of year-over-year financial performance. The adjustment for aircraft fuel and related taxes allows investors to better understand and analyze our non-fuel costs and year-over-year financial performance.

Profit sharing. We adjust for profit sharing because this adjustment allows investors to better understand and analyze our recurring cost performance and provides a more meaningful comparison of our core operating costs to the airline industry.


Three Months Ended

(in millions)

December 31, 2023

December 31, 2022

Operating Expense

$                    12,900

$                    11,965

Adjusted for:



Third-party refinery sales

(563)

(1,142)

Aircraft fuel and related taxes

(2,941)

(2,849)

Profit sharing

(299)

(272)

Restructuring charges

118

Non-Fuel Cost

$                      9,098

$                      7,821

 


Year Ended

(in millions)

December 31, 2023

December 31, 2022

Operating Expense

$                    52,527

$                    46,921

Adjusted for:



Third-party refinery sales

(3,379)

(4,977)

Aircraft fuel and related taxes

(11,069)

(11,482)

Profit sharing

(1,383)

(563)

One-time pilot agreement expenses

(864)

Restructuring charges

124

Non-Fuel Cost

$                    35,831

$                    30,024

 


Three Months Ended


% Change


December 31, 2023

December 31, 2022


CASM (cents)

18.84

20.11



Adjusted for:





Third-party refinery sales

(0.82)

(1.92)



Aircraft fuel and related taxes

(4.30)

(4.78)



Profit sharing

(0.44)

(0.46)



Restructuring charges

0.20



CASM-Ex

13.29

13.14


1.1 %

 


Year Ended


% Change


December 31, 2023

December 31, 2022


CASM (cents)

19.31

20.12



Adjusted for:





Third-party refinery sales

(1.24)

(2.13)



Aircraft fuel and related taxes

(4.07)

(4.92)



Profit sharing

(0.51)

(0.24)



One-time pilot agreement expenses

(0.32)



Restructuring charges

0.05



CASM-Ex

13.17

12.87


2.3 %

 

Operating Expense, adjusted



Three Months Ended

(in millions)

December 31, 2023

December 31, 2022

Operating expense

$                    12,900

$                    11,965

Adjusted for:



Third-party refinery sales

(563)

(1,142)

MTM adjustments and settlements on hedges

(7)

(70)

Restructuring charges

118

Operating expense, adjusted

$                    12,330

$                    10,871

 


Year Ended

(in millions)

December 31, 2023

December 31, 2022

Operating expense

$                    52,527

$                    46,921

Adjusted for:



Third-party refinery sales

(3,379)

(4,977)

MTM adjustments and settlements on hedges

52

(29)

One-time pilot agreement charges

(864)

Restructuring charges

124

Operating expense, adjusted

$                    48,335

$                    42,039

 

Total fuel expense, adjusted and Average fuel price per gallon, adjusted








Average Price Per Gallon




Three Months Ended




Three Months Ended




December 31,

December 31,


% Change


December 31,

December 31,


% Change

(in millions, except per gallon data)

2023

2022



2023

2022


Total fuel expense

$             2,941

$             2,849




$               3.01

$               3.28



Adjusted for:










MTM adjustments and settlements on hedges

(7)

(70)




(0.01)

(0.08)



Total fuel expense, adjusted

$             2,933

$             2,778


6 %


$               3.00

$               3.20


(6) %

 







Average Price Per Gallon




Year Ended




Year Ended




December 31,

December 31,


% Change


December 31,

December 31,


% Change

(in millions, except per gallon data)

2023

2022



2023

2022


Total fuel expense

$           11,069

$           11,482




$               2.82

$               3.36



Adjusted for:










MTM adjustments and settlements on hedges

52

(29)




0.01

(0.01)



Total fuel expense, adjusted

$           11,121

$           11,453


(3) %


$               2.83

$               3.36


(16) %

 

Adjusted Net Debt. Delta uses adjusted total debt, including aircraft rent, in addition to adjusted debt and finance leases, to present estimated financial obligations. Delta reduces adjusted total debt by cash, cash equivalents, short-term investments and LGA restricted cash, resulting in adjusted net debt, to present the amount of assets needed to satisfy the debt. Management believes this metric is helpful to investors in assessing the company's overall debt profile.






Change

(in millions)

December 31, 2023

December 31, 2022


Debt and finance lease obligations

$                    20,054

$                    23,030



Plus: sale-leaseback financing liabilities

1,887

2,180



Plus: unamortized discount/(premium) and debt issue cost, net and other

83

138



Adjusted debt and finance lease obligations

$                    22,024

$                    25,349



Plus: 7x last twelve months' aircraft rent

3,724

3,558



Adjusted total debt

$                    25,748

$                    28,906



Less: cash, cash equivalents and short-term investments

(3,869)

(6,534)



Less: LGA restricted cash

(455)

(69)



Adjusted net debt

$                    21,424

$                    22,303


$            (879)

 

Gross Capital Expenditures. We adjust capital expenditures for the following items to determine gross capital expenditures for the reasons described below:

Net cash flows related to certain airport construction projects. Cash flows related to certain airport construction projects are included in capital expenditures. We have adjusted for these items because management believes investors should be informed that a portion of these capital expenditures from airport construction projects are either funded with restricted cash specific to these projects or reimbursed by a third party.

Financed aircraft acquisitions. This adjusts capital expenditures to reflect aircraft deliveries that are leased as capital expenditures. The adjustment is based on their original contractual purchase price or an estimate of the aircraft's fair value and provides a more meaningful view of our investing activities.


Three Months Ended

(in millions)

December 31, 2023

December 31, 2022

Flight equipment, including advance payments

$                      1,085

$                      1,643

Ground property and equipment, including technology

517

557

Adjusted for:



Net cash flows related to certain airport construction projects

(400)

(87)

Gross capital expenditures

$                      1,201

$                      2,113

 



Year Ended

(in millions)

December 31, 2023

December 31, 2022

Flight equipment, including advance payments

$                      3,645

$                      4,495

Ground property and equipment, including technology

1,678

1,871

Adjusted for:



Financed aircraft acquisitions

461

206

Net cash flows related to certain airport construction projects

(479)

(564)

Gross capital expenditures

$                      5,305

$                      6,008

 

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SOURCE Delta Air Lines