EXHIBIT 99.1
FOR IMMEDIATE DISTRIBUTION
CONTACT: Corporate Communications Investor Relations
404-715-2554 404-715-6679
DELTA AIR LINES REPORTS RESULTS FOR DECEMBER 2004 QUARTER AND FULL YEAR
ATLANTA, Jan. 20, 2005 - Delta Air Lines (NYSE: DAL) today reported results for
the quarter and year ended Dec. 31, 2004, and other significant news. The key
points are, Delta:
o Reports a fourth quarter net loss of $2.2 billion, or $16.58 loss per
share, including non-cash charges totaling $1.4 billion. Full year 2004
net loss is $5.2 billion, or $41.07 loss per share, including non-cash
charges totaling $2.9 billion.
o Excluding the unusual items described below, reports a fourth quarter
net loss of $780 million, or $5.88 loss per share, and a full year 2004
net loss of $2.3 billion, or $18.10 loss per share.
o Achieves critical milestones in its transformation plan during the
December 2004 quarter, including reaching agreement with pilots on
contractual changes designed to deliver $1 billion in long-term, annual
cost savings, and completing agreements to borrow up to $1.13 billion.
o Ends quarter with $1.8 billion in unrestricted cash.
Delta Air Lines reported a net loss of $2.2 billion and a loss per share
of $16.58 for the December 2004 quarter. In the December 2003 quarter, Delta
reported a net loss of $327 million and loss per share of $2.69. For the full
year 2004, Delta reported a net loss of $5.2 billion and a loss per share of
$41.07, compared to a net loss of $773 million and a loss per share of $6.40 for
the full year 2003.
Excluding the unusual items described below, the December 2004 quarter
net loss and loss per share were $780 million and $5.88, respectively,(1)
compared to a net loss of $207 million and a loss per share of $1.71 in the
December 2003 quarter. Excluding the unusual items described below, the full
year 2004 net loss and loss per share were $2.3 billion and $18.10,
respectively, compared to a net loss of $1.0 billion and a loss per share of
$8.58 for the full year 2003.
"High fuel prices and domestic yields that continue to decline resulted
in another quarter of disappointing results. These numbers show clearly the
difficulties our airline will continue to face in 2005," said Gerald Grinstein,
Delta's chief executive officer. "At the same time, Delta made important
progress toward our transformation goals, including moving forward with our cost
reduction efforts and completing key financial transactions - accomplishments
that would not have been possible without the participation and commitment of
the entire Delta team."
- more -
Page 2
FINANCIAL PERFORMANCE
Fourth quarter operating revenues increased 0.9 percent, while passenger
unit revenues decreased 5.6 percent, compared to the December 2003 quarter.
Continued weak domestic yields, down 7.7 percent as compared to the prior-year
quarter, drove the decline in passenger unit revenues. The load factor for the
December 2004 quarter was 73.7 percent, a 1.1 point increase as compared to the
December 2003 quarter. System capacity was up 5.8 percent and mainline capacity
was up 6.2 percent from the prior-year quarter. Detailed traffic, capacity, load
factor, yield and passenger unit revenue information is provided in Note 2.
Operating expenses for the December 2004 quarter increased 48.4 percent
from the December 2003 quarter and unit costs increased 40.2 percent. Excluding
the unusual items described below, operating expenses for the December 2004
quarter increased 13.1 percent from the corresponding period in the prior year.
Fuel expense increased 75.5 percent, or $385 million, with approximately 94
percent of the increase resulting from higher fuel prices. Excluding the unusual
items described below, consolidated system unit costs increased 6.9 percent and
mainline unit costs increased 5.6 percent. Excluding the unusual items described
below, fuel price neutralized unit costs (2),(3) for the consolidated system
decreased 2.2 percent and mainline fuel price neutralized unit costs decreased
3.9 percent.
"2004 was a challenging year for Delta, a fact that is clearly
represented in the results we reported today. This year was also one of change,
in which we developed and began to implement a plan for our business that is
designed to enable us to compete going forward. Not only is this transformation
plan well under way, we can report that we have made significant progress toward
our goals," said Michael J. Palumbo, Delta's executive vice president and chief
financial officer. "However, a great deal of work remains to be accomplished and
we will continue to face significant challenges in 2005."
In the December 2004 quarter, Delta recognized a reduction in fuel
expenses of $18 million, which represents the remaining portion of the $82
million deferred gain recorded in the March 2004 quarter from the early
settlement of its fuel hedge contracts. Delta's average fuel price for the
quarter was $1.42 per gallon.
Guidance on capacity, unit costs and other items is provided below.
LIQUIDITY AND FINANCIAL TRANSACTIONS
At Dec. 31, 2004, Delta had $2.1 billion in cash, of which $1.8 billion
was unrestricted. Delta had negative cash flow from operations of $636 million
in the December 2004 quarter. Capital expenditures for the quarter were
approximately $191 million, including $89 million for aircraft.
- more -
Page 3
During the December 2004 quarter, Delta completed agreements with GE
Commercial Finance and American Express Travel Related Services Company, Inc. to
borrow up to $1.13 billion. At Dec. 31, 2004, the company had borrowed $811
million under these agreements. As previously announced, during the December
2004 quarter Delta also:
o Exchanged $237 million of secured notes due in 2005 and 2006 for
$235 million of newly issued, secured notes due in 2008;
o Exchanged $135 million of unsecured notes due in 2005 for a like
amount of newly issued, unsecured notes due in 2007 and 5.5
million shares of common stock;
o Sold its equity investment in Orbitz, Inc. for $143 million;
o Sold eight MD-11 aircraft and related inventory for $227
million;
o Completed agreements with certain aircraft lessors and lenders
to deliver $57 million in average annual concessions between
2005 and 2009. The company issued a total of 4.4 million shares
of common stock related to these agreements; and
o Reached agreements with 115 suppliers to obtain $46 million in
average annual benefits through 2007.
During the December 2004 quarter Delta also completed agreements with
certain other aircraft lenders to defer $112 million in debt obligations from
2004 and 2006 to later years. Additionally, subsequent to Dec. 31, 2004, Delta
sold for $36 million a promissory note the company previously received in
conjunction with the June 2003 sale of its equity investment in Worldspan.
Other significant transactions completed during the year include (1) the
issuance, in February 2004, of $325 million in convertible debt; (2) the
deferral of delivery of certain Boeing 737 and Boeing 777 aircraft from 2005 and
2006 to 2007 through 2009; and (3) the amendment, in July 2004, of an existing
credit agreement which resulted in an additional $152 million of liquidity.
TRANSFORMATION PLAN
On Sept. 8, 2004, Delta outlined key elements of its transformation plan
which is intended to deliver approximately $5 billion in annual benefits by 2006
(as compared to 2002) while also improving the service provided to its
customers.
Delta's transformation plan includes the following targeted annual
benefits:
(IN MILLIONS) 2005 2006
- ------------------------------------------------------------------------------
Profit Improvement Initiatives $2,300 $2,300
Non-pilot operational improvements 1,075 1,600
Pilot cost reduction 900 1,000
Other benefits 135 125
- ------------------------------------------------------------------------------
Total $4,410 $5,025
==============================================================================
- more -
Page 4
By the end of 2004, Delta achieved $2.3 billion of benefits under its
Profit Improvement Initiatives, which began at the end of 2002. Delta has
identified, and has begun implementation of, key intiatives to support the
remaining $2.7 billion in targeted benefits. As a result, the company believes
that it is on track to deliver the remaining $2.7 billion in targeted benefits
through the implementation of the following key initiatives:
NON-PILOT EMPLOYEE INITIATIVES - These initiatives include (1)
additional profit improvement initiatives to increase productivity and
enhance technology; (2) an across-the-board, 10 percent pay reduction
for executives, supervisory, administrative, and frontline employees
that became effective Jan. 1, 2005; (3) increases to the shared cost of
healthcare coverage; (4) the elimination of the healthcare coverage
subsidy for employees who retire after Jan. 1, 2006; and (5) the
elimination of 6,000 - 7,000 jobs by December 2005. Approximately 3,400
employees have elected to participate in voluntary workforce reduction
programs, most of which will be completed by April 2005.
HUB REDESIGN - Delta previously announced decisions (1) to redesign its
primary hub in Atlanta to a continuous, "un-banked" hub to increase
capacity with the same number of aircraft, while reducing congestion and
(2) to dehub its Dallas/Ft. Worth operation and redeploy those assets to
grow its hub operations in Atlanta, Cincinnati and Salt Lake City. These
initiatives call for more than 51% of Delta's network to be restructured
by Jan. 31, 2005. The company believes these initiatives will generate
incremental benefits beginning in 2005.
PILOT COST REDUCTION - Delta's new agreement with its pilots includes
(1) a 32.5 percent reduction to base pay rates on Dec. 1, 2004 with no
scheduled increases in base pay rates during the term of the agreement;
and (2) benefit changes such as a 16 percent reduction in vacation pay,
increased cost sharing of medical benefits, the amendment of the defined
benefit pension plan to stop service accrual as of Dec. 31, 2004, and
the establishment of a defined contribution pension plan as of Jan. 1,
2005. The agreement becomes amendable on Dec. 31, 2009.
On Jan. 5, 2005, Delta announced the expansion of its SimpliFares(TM)
initiative within the 48 contiguous Unites States. SimpliFares is a fundamental
change in Delta's pricing structure which supports the company's commitment to
become a simpler and more customer-focused airline. SimpliFares reduced
unrestricted fares on some routes by as much as 50 percent. Additionally, fare
categories have been simplified, are easier to understand and no longer require
a Saturday night stay.
As part of a company-wide initiative to make the customer experience
more comfortable and affordable, Delta recently began to refurbish its aircraft
to include brighter interiors and all-leather seats; simplified its SkyMiles
program elite qualification; and reduced its ticket change fee. Future plans
include improvements to delta.com, Delta's onboard food product and employee
uniforms.
-more-
Page 5
EXPLANATION OF UNUSUAL ITEMS
DECEMBER 2004 QUARTER UNUSUAL ITEMS
In the December 2004 quarter, Delta recorded unusual items totaling a
$1.4 billion charge. These items are described below:
(1) A $1.9 billion goodwill impairment charge in accordance with
SFAS 142(4). This standard requires a company to assess, at
least annually, whether the book value of an entity is at least
equal to its fair value. If not, an impairment charge must be
recorded. Increased fuel prices, the difficult revenue
environment, and the implementation of certain initiatives
pursuant to our recently completed strategic review resulted in
reductions to Atlantic Southeast Airlines, Inc. (ASA) and
Comair, Inc. fair value estimates. This resulted in the
requirement that we write-off ASA and Comair goodwill.
(2) A $194 million charge related to voluntary and involuntary
workforce reduction programs;
(3) A $120 million settlement charge related to the company's
defined benefit pension plan for pilots (Pilot Plan). This
charge relates to the lump sum distributions under the Pilot
Plan for 363 pilots who retired. As a result of the lump sum
distributions, Delta must accelerate the recognition of
actuarial losses in accordance with SFAS 88(5);
(4) A $527 million gain related to the elimination of the healthcare
coverage subsidy for future retirees;
(5) A $123 million gain related to the sale of Delta's equity
investment in Orbitz, Inc.; and
(6) A $114 million tax benefit from a reduction in the deferred
tax asset allowance that resulted from the goodwill impairment
charge discussed above.
DECEMBER 2003 QUARTER UNUSUAL ITEMS
In the December 2003 quarter, Delta recorded (1) a settlement charge
related to the Pilot Plan; (2) a charge associated with the sale of 11 B737-800
aircraft; (3) a gain on the sale of certain equity investments; (4) a reduction
to operating expenses from revised estimates of remaining costs associated with
Delta's 2002 workforce reduction programs; and (5) a gain related to derivative
and hedging activities accounted for under SFAS 133. These items totaled a net
charge of $120 million, net of tax.
CONSOLIDATED STATEMENTS OF OPERATIONS
The attached Consolidated Statements of Operations for the three and
12 month periods ended Dec. 31, 2004 and 2003 show Delta's net loss as
reported under Generally Accepted Accounting Principles in the United States
(GAAP), as well as net loss excluding the unusual items described above. Delta
believes this information is helpful to investors to evaluate recurring
operational performance because (1) the goodwill impairment charge is a one-time
event; (2) the charges related to workforce reduction programs, pilot
retirements and the sale of aircraft (in 2003), and the gains from changes in
retiree healthcare benefits and sales of equity investments are not
representative of recurring operations; and (3) the SFAS 133 charge in 2003
reflects volatility in earnings driven by changes in the market which are beyond
the company's control. Delta no longer excludes SFAS 133 charges due to the
reduction in our fuel hedge portfolio and other investments. For further
information, please see Note 1 to the attached Consolidated Statements of
Operations.
- more -
Page 6
2005 GUIDANCE
Delta estimates that its funding obligation in 2005 for its defined
benefit pension and defined contribution plans will be approximately $400
million to $450 million (6).
Capital expenditures for March 2005 quarter are estimated to be
approximately $289 million, including approximately $147 million for aircraft.
All of our regional jet aircraft deliveries in 2005 will be financed under
existing agreements. The remaining mainline aircraft to be delivered in 2005 are
scheduled to be sold to a third party immediately upon delivery from the
manufacturer pursuant to a previously announced agreement.
The following table includes certain projected information for the
periods presented.
Year-Over-Year Changes
----------------------
Q1 2005 Full Year 2005
------- --------------
Capacity Up 6% to 8% Up 6% to 8%
Consolidated fuel price neutralized unit costs,
excluding unusual items (7) Down approximately 8% Down 9% to 10%
(vs. prior year unit costs, excluding unusual items)
Mainline fuel price neutralized unit
costs, excluding unusual items (7)
(vs. prior year unit costs, excluding
unusual items) Down approximately 10% Down 11% to 12%
OTHER MATTERS
Attached to this earnings release are Delta's Consolidated Statements of
Operations for the three and 12 months ended Dec. 31, 2004 and 2003; a
statistical summary for those periods; selected balance sheet data as of
Dec. 31, 2004, and Dec. 31, 2003; and a reconciliation of certain GAAP to
non-GAAP financial measures.
Delta will host a webcast to discuss its quarterly earnings today, Jan.
20, 2005 at 9:30 a.m. Eastern Standard Time. The webcast is available via the
Internet at www.delta.com/inside/investors/index.jsp.
Delta is the world's second largest airline in terms of passengers
carried and the leading U.S. carrier across the Atlantic, offering daily flights
to 492 destinations in 89 countries on Delta, Song, Delta Shuttle, the Delta
Connection carriers and its worldwide partners. Delta's marketing alliances
allow customers to earn and redeem frequent flyer miles on more than 14,000
flights offered by SkyTeam and other partners. Delta is a founding member of
SkyTeam, a global airline alliance that provides customers with extensive
worldwide destinations, flights and services. For more information, please visit
delta.com.
-more-
Page 7
ENDNOTES
1 Note 1 to the attached Consolidated Statements of Operations shows a
reconciliation of Delta's net loss reported under accounting principles
generally accepted in the United States (GAAP) to the net loss excluding unusual
items, as well as reconciliations of other financial measures including and
excluding unusual items.
2 "Fuel price neutralized unit costs" means the amount of operating cost
incurred per available seat mile during a reporting period, adjusting the
average fuel price per gallon for that period to equal the average fuel price
per gallon for the corresponding period in the prior year.
3 Delta believes discussion of fuel price neutralized unit costs assists
investors in understanding the impact of changes in fuel costs on our
operations.
4 Statement of Financial Accounting Standard (SFAS) No. 142, "Goodwill and
Other Intangible Assets."
5 SFAS No. 88, "Employers' Accounting for Settlements and Curtailments of
Defined Benefit Pension Plans and for Termination Benefits"
6 Estimates of Delta's future funding obligations under its defined benefit
pension plans are based on various assumptions, including the actual market
performance of the plan assets, future long-term investment grade corporate bond
rates and regulatory requirements.
7 Delta is unable to reconcile this financial measure to unit costs under
GAAP for the future periods presented because Delta cannot project specific
unusual items that may occur in the future periods presented.
STATEMENTS IN THIS NEWS RELEASE THAT ARE NOT HISTORICAL FACTS, INCLUDING
STATEMENTS REGARDING DELTA'S ESTIMATES, BELIEFS, EXPECTATIONS, INTENTIONS,
STRATEGIES OR PROJECTIONS, MAY BE "FORWARD-LOOKING STATEMENTS" AS DEFINED IN THE
PRIVATE SECURITIES LITIGATION REFORM ACT OF 1995. ALL FORWARD-LOOKING STATEMENTS
INVOLVE A NUMBER OF RISKS AND UNCERTAINTIES THAT COULD CAUSE ACTUAL RESULTS TO
DIFFER MATERIALLY FROM THE ESTIMATES, BELIEFS, EXPECTATIONS, INTENTIONS,
STRATEGIES AND PROJECTIONS REFLECTED IN OR SUGGESTED BY THE FORWARD-LOOKING
STATEMENTS. THESE RISKS AND UNCERTAINTIES INCLUDE, BUT ARE NOT LIMITED TO, OUR
ABILITY TO REDUCE OPERATING EXPENSES, OUR ABILITY TO OBTAIN NECESSARY FINANCING
OR DEBT PAYMENT DEFERRALS TO MEET OUR LIQUIDITY NEEDS, OUR ABILITY TO COMPLY
WITH FINANCIAL COVENANTS IN OUR LOAN AGREEMENTS, OUR PENSION PLAN FUNDING
OBLIGATIONS, PILOT EARLY RETIREMENTS, THE COST OF AIRCRAFT FUEL, THE EFFECT OF
CREDIT RATINGS DOWNGRADES, INTERRUPTIONS OR DISRUPTIONS IN SERVICE AT ONE OF OUR
HUB AIRPORTS, OUR INCREASING DEPENDENCE ON TECHNOLOGY IN OUR OPERATIONS, LABOR
ISSUES, THE EFFECTS OF TERRORIST ATTACKS, RESTRUCTURINGS BY COMPETITORS AND
COMPETITIVE CONDITIONS IN THE AIRLINE INDUSTRY. ADDITIONAL INFORMATION
CONCERNING RISKS AND UNCERTAINTIES THAT COULD CAUSE DIFFERENCES BETWEEN ACTUAL
RESULTS AND FORWARD-LOOKING STATEMENTS IS CONTAINED IN DELTA'S SECURITIES AND
EXCHANGE COMMISSION FILINGS, INCLUDING ITS FORM S-1, FILED WITH THE COMMISSION
ON DECEMBER 21, 2004. CAUTION SHOULD BE TAKEN NOT TO PLACE UNDUE RELIANCE ON
DELTA'S FORWARD-LOOKING STATEMENTS, WHICH REPRESENT DELTA'S VIEWS ONLY AS OF
JANUARY 20, 2005, AND WHICH DELTA HAS NO CURRENT INTENTION TO UPDATE.
Page 8
DELTA AIR LINES, INC.
CONSOLIDATED STATEMENTS OF OPERATIONS
(unaudited; in millions, except share and per share data)
Three Months Ended
December 31,
Percent
2004 2003 Change
Operating Revenues:
Passenger:
Mainline $2,611 $2,619 (0.3%)
Regional affiliates (a) 718 718 -
Cargo 136 125 8.8%
Other, net 176 148 18.9%
Total operating revenues 3,641 3,610 0.9%
Operating Expenses:
Salaries and related costs 1,529 1,552 (1.5%)
Aircraft fuel 895 510 75.5%
Depreciation and amortization 315 316 (0.3%)
Contracted services 260 227 14.5%
Contract carrier arrangements 224 212 5.7%
Landing fees and other rents 218 214 1.9%
Aircraft maintenance materials
and outside repairs 163 165 (1.2%)
Aircraft rent 172 183 (6.0%)
Other selling expenses 106 112 (5.4%)
Passenger commissions 39 54 (27.8%)
Passenger service 89 83 7.2%
Impairment of intangible assets 1,875 - NM
Pension settlements, asset writedowns,
restructuring and related items, net (212) 232 NM
Other 224 115 94.8%
Total operating expenses 5,897 3,975 48.4%
Operating Loss (2,256) (365) (518.1%)
Other Income (Expense):
Interest expense (223) (199) (12.1%)
Interest income 10 10 -
Gain from sale of investments, net 123 37 232.4%
Gain on extinguishment of debt 8 - NM
Fair value adjustments of
SFAS 133 derivatives 13 7 85.7%
Miscellaneous income (expense), net 12 (2) 700.0%
Total other expense, net (57) (147) 61.2%
Loss Before Income Taxes (2,313) (512) (351.8%)
Income Tax Benefit 107 185 (42.2%)
Net Loss (2,206) (327) (574.6%)
Preferred Stock Dividends (5) (5) -
Net Loss Available to
Common Shareowners $(2,211) $ (332) (566.0%)
Basic and Diluted Loss Per Share $(16.58) $(2.69) (516.4%)
Net Loss Excluding (Note 1) $(780) $ (207) (276.8%)
Basic and Diluted Loss Per Share
Excluding (Note 1) $(5.88) $(1.71) (243.9%)
Weighted Average Shares Used In
Basic and Diluted Loss Per
Share Computation 133,352,838 123,474,030 8.0%
Operating Margin (62.0%) (10.1)% (51.9)pts.
(a) Includes revenue from our wholly owned subsidiaries Atlantic Southeast
Airlines, Inc. and Comair, Inc., and from our contract carriers, Flyi, Inc.,
Chautauqua Airlines, Inc., and SkyWest Airlines, Inc., for all periods
presented.
-more-
Page 9
DELTA AIR LINES, INC.
CONSOLIDATED STATEMENTS OF OPERATIONS
(unaudited; in millions, except share and per share data)
Twelve Months Ended
December 31,
Percent
2004 2003 Change
Operating Revenues:
Passenger:
Mainline $10,880 $10,393 4.7%
Regional affiliates (a) 2,910 2,629 10.7%
Cargo 500 467 7.1%
Other, net 712 598 19.1%
Total operating revenues 15,002 14,087 6.5%
Operating Expenses:
Salaries and related costs 6,338 6,342 (0.1%)
Aircraft fuel 2,924 1,938 50.9%
Depreciation and amortization 1,244 1,230 1.1%
Contracted services 999 886 12.8%
Contract carrier arrangements 932 784 18.9%
Landing fees and other rents 875 858 2.0%
Aircraft maintenance materials
and outside repairs 681 630 8.1%
Aircraft rent 716 727 (1.5%)
Other selling expenses 502 479 4.8%
Passenger commissions 204 211 (3.3%)
Passenger service 349 325 7.4%
Impairment of intangible assets 1,875 - NM
Pension settlements, asset writedowns,
restructuring and related items, net (41) 268 NM
Appropriations Act reimbursements - (398) NM
Other 712 592 20.3%
Total operating expenses 18,310 14,872 23.1%
Operating Loss (3,308) (785) (321.4%)
Other Income (Expense):
Interest expense (824) (757) (8.9%)
Interest income 37 36 2.8%
Gain from sale of investments 123 321 (61.7%)
Gain on extinguishment of debt, net 9 - NM
Fair value adjustments of
SFAS 133 derivatives (31) (9) (244.4%)
Miscellaneous income, net 2 5 (60.0%)
Total other expense, net (684) (404) (69.3%)
Loss Before Income Taxes (3,992) (1,189) (235.7%)
Income Tax (Provision) Benefit (1,206) 416 (389.9%)
Net Loss (5,198) (773) (572.4%)
Preferred Stock Dividends (19) (17) (11.8%)
Net Loss Available
To Common Shareowners $(5,217) $(790) (560.4%)
Basic and Diluted Loss Per Share $(41.07) $(6.40) (541.7%)
Net Loss Excluding(Note 1) $(2,281) $(1,042) (118.9%)
Basic and Diluted Loss Per Share
Excluding(Note 1) $(18.10) $(8.58) (111.0%)
Weighted Average Shares Used In
Basic and Diluted Loss Per
Share Computation 127,033,234 123,397,129 2.9%
Operating Margin (22.1%) (5.6%) (16.5)pts.
(a) Includes revenue from our wholly owned subsidiaries Atlantic Southeast
Airlines, Inc. and Comair, Inc., and from our contract carriers Flyi, Inc.,
Chautauqua Airlines, Inc., and SkyWest Airlines, Inc., for all periods
presented.
-more-
Page 10
DELTA AIR LINES, INC.
STATISTICAL SUMMARY
(unaudited)
Three Months Ended
December 31,
Percent
2004 2003 Change
Consolidated:
Revenue Psgr Miles (millions) (a) 28,110 26,191 7.3%
Available Seat Miles (millions) (a) 38,143 36,063 5.8%
Passenger Mile Yield (cents) (a) 11.84 12.74 (7.1%)
Operating Revenue Per
Available Seat Mile (cents) (a) 9.55 10.01 (4.6%)
Passenger Revenue Per
Available Seat Mile (cents) (a) 8.73 9.25 (5.6%)
Operating Cost per
Available Seat Mile (cents) (a) 15.46 11.03 40.2%
Operating Cost per Available
Seat Mile - Excluding (cents) (a)
(Note 1) 11.10 10.38 6.9%
Fuel Price Neutralized
Operating Cost per Available
Seat Mile - Excluding (cents) (a)
(Note 1) 10.15 10.38 (2.2%)
Passenger Load Factor (percent) (a) 73.70 72.62 1.1 pts.
Breakeven Passenger Load
Factor (percent) (a) 123.63 80.58 1.7 pts.
Breakeven Passenger Load Factor (a)
- Excluding (percent)(Note 1) 86.82 75.53 11.4 pts.
Passengers Enplaned (thousands) 27,794 26,514 4.8%
Fuel Gallons Consumed (millions) 631 602 4.8%
Average Price Per Fuel Gallon,
net of hedging gains (cents) 141.84 84.65 67.6%
Number of Aircraft in Fleet,
End of Period 845 833 1.1%
Full-Time Equivalent Employees,
End of Period 69,150 70,600 (2.1%)
Mainline:
Revenue Psgr Miles (millions) 24,314 22,592 7.6%
Available Seat Miles (millions) 32,714 30,800 6.2%
Operating Cost per
Available Seat Mile (cents) 9.75 10.61 (8.1%)
Operating Cost per Available
Seat Mile - Excluding (cents)(Note 1) 10.40 9.85 5.6%
Fuel Price Neutralized
Operating Cost per Available
Seat Mile - Excluding (cents)
(Note 1) 9.47 9.85 (3.9%)
Number of Aircraft in Fleet,
End of Period 541 551 (2.4%)
(a) The 2004 and 2003 statistics above include our contract carrier
arrangements with Flyi, Inc., Chautauqua Airlines, Inc., and
SkyWest Airlines, Inc., for all periods presented.
-more-
Page 11
DELTA AIR LINES, INC.
STATISTICAL SUMMARY
(unaudited)
Twelve Months Ended
December 31,
Percent
2004 2003 Change
Consolidated:
Revenue Psgr Miles (millions) (a) 113,311 102,301 10.8%
Available Seat Miles (millions) (a) 151,679 139,505 8.7%
Passenger Mile Yield (cents) (a) 12.17 12.73 (4.4%)
Operating Revenue Per
Available Seat Mile (cents) (a) 9.89 10.10 (2.1%)
Passenger Revenue Per
Available Seat Mile (cents) (a) 9.09 9.33 (2.6%)
Operating Cost per
Available Seat Mile (cents) (a) 12.07 10.66 13.2%
Operating Cost per Available
Seat Mile - Excluding (cents) (a)
(Note 1) 10.86 10.75 1.0%
Fuel Price Neutralized
Operating Cost per Available
Seat Mile - Excluding (cents) (a)
(Note 1) 10.30 10.75 (4.2%)
Passenger Load Factor (percent) (a) 74.70 73.33 1.4 pts.
Breakeven Passenger Load
Factor (percent) (a) 92.62 77.75 4.8 pts.
Breakeven Passenger Load Factor (a)
- Excluding (percent)(Note 1) 82.69 78.44 4.3 pts.
Passengers Enplaned (thousands) 110,000 104,452 5.3%
Fuel Gallons Consumed (millions) 2,527 2,370 6.6%
Average Price Per Fuel Gallon,
net of hedging gains (cents) 115.70 81.78 41.5%
Number of Aircraft in Fleet,
End of Period 845 833 1.1%
Full-Time Equivalent Employees,
End of Period 69,150 70,600 (2.1%)
Mainline:
Revenue Psgr Miles (millions) 98,280 89,432 9.9%
Available Seat Miles (millions) 129,974 120,462 7.9%
Operating Cost per
Available Seat Mile (cents) 10.20 10.21 (0.1%)
Operating Cost per Available
Seat Mile - Excluding (cents)(Note 1) 10.23 10.25 (0.2%)
Fuel Price Neutralized
Operating Cost per Available
Seat Mile - Excluding (cents)
(Note 1) 9.68 10.25 (5.6%)
Number of Aircraft in Fleet,
End of Period 541 551 (2.4%)
(a) The 2004 and 2003 statistics above include our contract carrier arrangement
with Flyi, Inc., Chautauqua Airlines, Inc., and SkyWest Airlines, Inc., for all
periods presented.
-more-
Page 12
SELECTED BALANCE SHEET DATA:
December 31, December 31,
2004 2003
(unaudited)
(in millions)
Cash and cash equivalents $ 1,799 $ 2,710
Restricted cash 350 236
Total assets 21,801 25,939
Total debt and capital leases 13,898 12,559
Total shareowners' deficit (5,796) (659)
Note 1: The following tables show reconciliations of certain financial measures
adjusted for the items shown below.
Three Months Ended Twelve Months Ended
December 31, December 31,
2004 2003 2004 2003
(in millions)
Net loss $(2,206) $(327) $(5,198) $(773)
Items excluded (2003 items net of tax)
Impairment of intangible assets 1,875 -- 1,875 --
Pension settlements, asset writedowns,
restructuring and related items, net (212) 146 (41) 173
Appropriations Act reimbursements -- -- -- (251)
Gain from sale of investments, net (123) (21) (123) (197)
Fair value adjustments of SFAS 133
derivatives -- (5) -- 6
Deferred income tax asset reserve (114) -- 1,206 --
Total items excluded
(2003 items net of tax) 1,426 120 2,917 (269)
Net loss - excluding $(780) $(207) $(2,281) $(1,042)
Basic and Diluted loss per share $(16.58) $(2.69) $(41.07) $(6.40)
Items excluded (2003 items net of tax)
Impairment of intangible assets 14.06 -- 14.76 --
Pension settlements, asset writedowns,
restructuring and related items, net (1.59) 1.18 (0.33) 1.40
Appropriations Act reimbursements -- -- -- (2.03)
Gain from sale of investments, net (0.92) (0.17) (0.97) (1.59)
Gain on extinguishment of debt, net -- -- -- (0.01)
Fair value adjustments of SFAS 133
derivatives -- (0.03) -- 0.05
Deferred income tax asset reserve (0.85) -- 9.51 --
Total items excluded
(2003 items net of tax) 10.70 0.98 22.97 (2.18)
Basic and diluted loss per share
- excluding $(5.88) $(1.71) $(18.10) $(8.58)
-more-
Page 13
Note 1 (continued)
Three Months Ended Twelve Months Ended
December 31, December 31,
2004 2003 2004 2003
(in millions)
Operating expenses $ 5,897 $3,975 $ 18,310 $14,872
Items excluded:
Impairment of intangible assets (1,875) - (1,875) -
Pension settlements, asset writedowns,
restructuring and related items, net 212 (232) 41 (275)
Appropriations Act reimbursements - - - 398
Total items excluded (1,663) (232) (1,834) 123
Operating expenses - excluding $ 4,234 $3,743 $ 16,476 $14,995
(in millions)
Mainline operating expenses $ 3,189 $3,267 $ 13,261 $12,300
Items excluded:
Pension settlements, asset writedowns,
restructuring and related items, net 212 (232) 41 (275)
Appropriations Act reimbursements - - - 318
Total items excluded 212 (232) 41 43
Mainline operating expenses
- excluding $3,401 $3,035 $13,302 $12,343
Unit costs 15.46(cents) 11.03(cents) 12.07(cents) 10.66(cents)
Items excluded:
Impairment of intangible assets (4.92) - (1.24) -
Pension settlements, asset writedowns,
restructuring and related items, net 0.56 (0.65) 0.03 (0.20)
Appropriations Act reimbursements - - - 0.29
Total items excluded (4.36) 0.65 (1.21) 0.09
Unit costs - excluding 11.10(cents) 10.38(cents) 10.86(cents) 10.75(cents)
Mainline unit costs 9.75(cents) 10.61(cents) 10.20(cents) 10.21(cents)
Items excluded:
Pension settlements, asset writedowns,
restructuring and related items, net 0.65 (0.76) 0.03 (0.22)
Appropriations Act reimbursements - - - 0.26
Total items excluded 0.65 (0.76) 0.03 0.04
Unit costs - excluding 10.40(cents) 9.85(cents) 10.23(cents) 10.25(cents)
Breakeven load factor 123.63% 80.58% 92.62% 77.75%
Items excluded:
Impairment of intangible assets (41.51) - (10.16) -
Pension settlements, asset writedowns,
restructuring and related items, net 4.70 (5.05) 0.23 (1.55)
Appropriations Act reimbursements - - - 2.24
Total items excluded (36.81) (5.05) (9.93) 0.69
Breakeven load factor - excluding 86.82% 75.53% 82.69% 78.44%
-more-
Page 14
Note 1 (continued)
Three Months Ended Twelve Months Ended
Fuel price neutralized unit costs December 31, 2004 December 31, 2004
(in millions, except where noted)
Operating expenses - excluding $ 4,234 $ 16,476
Less fuel expense (895) (2,924)
Plus current year fuel gallons
x prior year fuel price(1)(2) 534 2,067
Fuel price neutralized operating expenses
- excluding $ 3,873 $ 15,619
ASMs 38,143 151,679
Fuel price neutralized unit costs
- excluding (cents) 10.15 10.30
vs. December 2003 quarter unit costs
- excluding (cents) 10.38 10.75
Change (2.2%) (4.2%)
Mainline fuel price neutralized unit cost
(in millions, except where noted)
Operating expenses - excluding $ 3,401 $ 13,302
Less fuel expense (739) (2,412)
Plus current year fuel gallons
X prior year fuel price (3)(4) 436 1,687
Fuel price neutralized operating expenses
- excluding $ 3,098 $ 12,577
ASM's 32,714 129,974
Fuel price neutralized unit costs
- excluding (cents) 9.47 9.68
vs. December 2003 quarter unit costs
- excluding (cents) 9.85 10.25
Change (3.9%) (5.6%)
Three Months Ended
December 31, 2004
Capital Expenditures
(in millions)
Cash used by investing activities - GAAP
Flight equipment, including advance payments (3)
Ground property and equipment additions 95
Add:
Aircraft seller financing 111
Advanced payments on aircraft, net 20
Less:
Boston airport terminal project expenditures (32)
Capital Expenditures $ 191
(1) 631 million gallons x 84.65 cents/gallon for the three months ended
December 31, 2004.
(2) 2.5 billion gallons x 81.78 cents/gallon for the year ended December 31,
2004.
(3) 529 million gallon x 82.45 cents/gallons for the three months ended
December 31, 2004.
(4) 2.1 billion gallons x 79.33 cents/gallons for the year ended December 31,
2004.
-more-
Page 14
NOTE 2.
DECEMBER 2004 QUARTER TRAFFIC, CAPACITY, LOAD FACTOR, YIELD AND UNIT REVENUE VS.
DECEMBER 2003 QUARTER
Year-Over-Year Change
North America Atlantic Latin America Pacific
------------- -------- ------------- -------
Traffic 5.7% 10.8% 25.2% 10.0%
Capacity 3.7% 11.1% 26.5% 10.3%
Load Factor 1.4 pts. (0.2) pts. (0.7) pts. (0.2) pts.
Yield (7.7%) (2.2%) (7.5%) (1.9%)
Passenger Unit Revenue (5.9%) (2.5%) (8.4%) (2.1%)