EXHIBIT 99.2
January 16, 2003
Dear Investors and Analysts,
To make more efficient use of the time allocated for this morning's conference
call, we are providing detailed variance information on our operating and
non-operating expenses to assist you in analyzing Delta's December 2002
quarterly results. This information is intended to supplement that provided in
the conference call (scheduled for 9:30 a.m. ET today) and in the earnings
release. December quarter revenue performance will be discussed in the
conference call.
Please feel free to call me at 404-715-6679 if you have any questions. Thank you
for your continued support of Delta Air Lines.
Gail Grimmett
SUPPLEMENTAL DECEMBER 2002 QUARTER DATA
DECEMBER 2002 QUARTER VS. DECEMBER 2001 QUARTER
- - Total operating expenses for the quarter decreased 8% to $3.7 billion.
Operating expenses, excluding unusual items, increased 2% to $3.52
billion on a 3% increase in capacity.
- - Excluding unusual items, Delta's total unit cost decreased 1.5% to 9.97
cents from 10.12 cents and fuel price neutralized unit costs decreased
3.9% to 9.73 cents from 10.12 cents.
- - Salaries and related expense increased 9% due primarily to increased
pension expense and medical costs, as well as growth at ASA and Comair.
- - Aircraft fuel expense increased 29% due primarily to an increase in
fuel prices. Delta's average fuel price per gallon, including hedge
proceeds, increased 23% to 76.03 cents from 62.04 cents.
- - Depreciation and amortization decreased 7% due to a change in our asset
base in the current year and the effects of a new accounting
pronouncement adopted in 2002 requiring no amortization to be recorded
for goodwill and certain intangible assets.
- - Contracted services expense decreased 6% due primarily to decreased
spending across workgroups.
- - Landing fees and other rents increased 8% due primarily to increased
landing fee rates in the current period as well as decreased costs
during the December 2001 quarter resulting from the Comair pilot
strike.
- - Aircraft maintenance materials and outside repairs decreased 20% due to
warranty recoveries and reduced maintenance volume and materials
consumption.
- - Aircraft rent decreased 2% due mainly to changes in our leased aircraft
fleet.
- - Other selling expenses decreased 6% due primarily to lower costs
associated with our mileage partnership programs.
- - Passenger commissions declined by 54% primarily due to the change in
our commission rate structure.
- - Passenger service expense decreased 16% due primarily to meal service
changes partially offset by increased passenger volume.
- - Other expenses decreased 8% primarily due to reduced costs related to
our frequent flyer program and other general and administrative costs,
partially offset by an increase in war risk insurance.
- - Interest expense increased $20 million as a result of higher levels of
debt outstanding, while interest income decreased $10 million due to
lower interest rates.
OTHER ITEMS
Aircraft Fleet
Our aircraft fleet, orders, options and rolling options at December 31, 2002 are
summarized in the following table. Options have scheduled delivery slots.
Rolling options replace options and are assigned delivery slots as options
expire or are exercised.
CURRENT FLEET
----------------------------------------------------- ----------------
AIRCRAFT TYPE OWNED CAPITAL OPERATING TOTAL AVERAGE AGE
------------- LEASE LEASE
----------------------------------------------------- ----------------
B-727-200 18 - 3 21 23.5
B-737-200 - 42 10 52 17.8
B-737-300 - - 26 26 16.1
B-737-800 71 - - 71 2.2
B-757-200 77 3 41 121 11.3
B-767-200 15 - - 15 19.6
B-767-300 4 - 24 28 12.9
B-767-300ER 51 - 8 59 6.9
B-767-400 21 - - 21 1.8
B-777-200 8 - - 8 2.9
MD-11 8 - 7 15 8.9
MD-88 63 - 57 120 12.5
MD-90 16 - - 16 7.1
EMB-120 29 - - 29 11.8
ATR-72 4 - 15 19 8.5
CRJ-100/200 73 - 122 195 3.7
CRJ-700 15 - - 15 0.3
TOTAL 473 45 313 831 9.0
=== == === === ===
DELIVERY IN CALENDAR
YEAR ENDING
--------------------------
AIRCRAFT ON FIRM ORDER 2003 2004
---------------------- --------------------------
CRJ-100/200 31 -
CRJ-700 20 23
TOTAL 51 23
==========================
DELIVERY IN CALENDAR
YEAR ENDING
---------------------------
ROLLING
AIRCRAFT ON OPTION 2003 2004 OPTIONS
------------------ --------------------------- --------
B-737-800 - 4 231
B-757-200 - 3 43
B-767-300/300ER - 0 9
B-767-400 - 2 3
B-777-200 - 2 14
CRJ-100/200 - 27 -
CRJ-700 - 5 -
TOTAL - 43 300
===== == ===