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Delta Air Lines 8-K Report, Material Agreement (Jan 12, 2024)

Reports
Earnings & Results·Material Agreements·Exhibits & Filings
Filing Date
Filed January 12, 2024
Period End
January 11, 2024
Security
DAL
In the record · 2016–202610-K1210-Q338-K210

DAL filed 12 annual reports (10-K), 33 quarterly reports (10-Q) and 210 current reports (8-K) between 2016 and 2026.

  1. Leadership change8-K · Apr ’18Apr ’18
  2. Impairment8-K · May ’20May ’20
  3. Material agreement8-K · Jul ’22Jul ’22
  4. Material agreement8-K · Jun ’26Jun ’26

01—Abstract

Summary

Summary of the 8-K filed January 12, 2024. Cited figures are marked; the original filing is the authoritative source.

Delta Air Lines, Inc. (NYSE: DAL) furnished results for the December 2023 quarter and full year 2023 and issued 2024 guidance in this 8-K filed January 12, 2024.

For full year 2023, GAAP operating revenue was $58.0 billiona, GAAP operating income was $5.5 billion (9.5% margin), GAAP pre-tax income was $5.6 billion, and GAAP diluted EPS was $7.17. On an adjusted basis, full year operating revenue was $54.7 billion, up 20% from 2022, adjusted operating income was $6.3 billion (11.6% margin), and adjusted EPS was $6.25. Adjusted operating cash flow was $7.2 billion, free cash flow was $2.0 billion, and adjusted debt to EBITDAR improved to 3.0x from 5.0x at the end of 2022.

Total debt and finance lease obligations were $20.1 billionb at year end, and the company repaid $4.1 billion of gross debt during the year. For the December quarter, GAAP operating revenue was $14.2 billion, GAAP operating income was $1.3 billion, and GAAP diluted EPS was $3.16. Adjusted diluted EPS was $1.28, and the GAAP results include an $848 million mark-to-market gain on the company's Wheels Up investment, which was excluded from the adjusted figures.

Management guided to full year 2024 EPS of $6 to $7c and free cash flow of $3 to $4 billion, and expects March quarter 2024 total revenue to rise 3% to 6% year over year with an operating margin of approximately 5%. Separately, Delta agreed to buy 20 Airbus A350-1000 aircraft, with options for up to 20 more widebody aircraft and deliveries beginning in 2026. The company stated the order is within its previously announced capital expenditure and capacity targets.

02—Key points

Key Highlights

  1. Full year 2023 GAAP diluted EPS was $7.17 on operating revenue of $58.0 billion; adjusted diluted EPS was $6.25 on adjusted operating revenue of $54.7 billion.
  2. Full year 2023 adjusted operating margin was 11.6%, up from 7.8% in 2022, and adjusted return on invested capital was 13.4%, up 5 points.
  3. Full year 2023 adjusted free cash flow was $2.0 billion, and adjusted debt to EBITDAR fell to 3.0x from 5.0x at the end of 2022.
  4. December quarter 2023 GAAP operating revenue was $14.2 billion, with adjusted revenue up 11% year over year, and GAAP diluted EPS was $3.16.
  5. 2024 guidance calls for EPS of $6 to $7 and free cash flow of $3 to $4 billion, with March quarter total revenue up 3% to 6% year over year.
  6. Delta agreed to purchase 20 Airbus A350-1000 aircraft with options for 20 more, with deliveries beginning in 2026.
  7. Adjusted net debt was $21.4 billion at December quarter end, a reduction of $879 million from year-end 2022.

03—Questions

Frequently Asked Questions

  1. How did Delta perform financially in full year 2023?

    Delta reported GAAP operating revenue of $58.0 billion, GAAP operating income of $5.5 billion, and GAAP diluted EPS of $7.17. On an adjusted basis, operating revenue was $54.7 billion, up 20% from 2022, adjusted operating margin was 11.6%, and adjusted EPS was $6.25.

  2. What is Delta's outlook for 2024?

    Delta guided to full year 2024 EPS of $6 to $7 and free cash flow of $3 to $4 billion. It also expects adjusted debt to EBITDAR of 2x to 3x and non-fuel unit costs up low-single digits over 2023.

  3. What drove the difference between GAAP and adjusted December quarter results?

    GAAP December quarter pre-tax income of $2.3 billion included an $848 million mark-to-market gain on the Wheels Up investment, which the company excluded from adjusted results. Adjusted pre-tax income was $1.1 billion and adjusted EPS was $1.28 versus GAAP EPS of $3.16. Adjustments also removed third-party refinery sales and certain hedge mark-to-market effects.

  4. What did Delta do with its debt and balance sheet in 2023?

    Delta repaid $4.1 billion of gross debt during 2023, reduced adjusted debt to EBITDAR to 3.0x from 5.0x, and reinstated its quarterly dividend. Total debt and finance lease obligations were $20.1 billion at year end, and liquidity was $6.8 billion, including $2.9 billion of undrawn revolver capacity.

  5. What aircraft commitment did Delta announce?

    Delta agreed to purchase 20 Airbus A350-1000 aircraft, with an option to buy up to 20 additional widebody aircraft. Deliveries are scheduled to begin in 2026, and the company said the order is within its previously announced capital expenditure and capacity targets.

04—Continue

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