Moderators: jsumali2, richierich, ua900, PanAm_DC10, hOMSaR

 
majano
Topic Author
Posts: 429
Joined: Sun Oct 14, 2018 10:45 am

Delta Announces Q4 '21 Financial Results

Thu Jan 13, 2022 4:42 pm

I am always impressed with the efficiency with which the major US airlines complete their annual reporting. Recently DL announced its 4th quarter and full year results for the 2021 year.

Unsurprisingly, the comparative year is 2019 because of the severe impact of Covid-19 on the 2020 results. Figures are in millions. Salient points (for me) are -
~ Revenue of $27,899 is down 36% from 2019, but up significantly from the $17,095 of 2020
~ Delta seems to have focused on their cargo operations with revenue of $1,032, up on pre-pandemic level of $753
~ Net profit of $280 (including government grants of $4,512) is down 94% from 2019. Obviously up significantly from 2020.

For whatever reason, Delta compares its balance sheet items to 2020. Of note on the balance sheet are:
~ Non-current liabilities are down $6,654 from 2020 but up 65% from the 2019 figure of $28,970. Interest expense reared up to $1,279 from $301 because of this.
~ Cash is down to $7,933 from $8,307
~ Cash from operating activities was $555, down from the 2019 figure of $969.

It will be interesting to see what the other majors post in the coming days and weeks.

In case there's any doubt, the $ represents United States Dollars in line with DL's reporting currency.

The Delta press release is here https://ir.delta.com/news/news-details/ ... fault.aspx

Note to moderators: feel free to delete the post if someone beat me to it. I ran a search before I started drafting it.
 
Prost
Posts: 2721
Joined: Wed Oct 03, 2012 6:23 pm

Re: Delta Announces Q4 '21 Financial Results

Thu Jan 13, 2022 5:24 pm

All DL employees are getting a $1250 bonus Feb. 14 as well.

https://www.ajc.com/news/atlanta-airpor ... CZYQTVM5E/
 
MohawkWeekend
Posts: 1220
Joined: Tue Jan 08, 2019 2:06 pm

Re: Delta Announces Q4 '21 Financial Results

Thu Jan 13, 2022 6:12 pm

Perhaps some one can help me understand about the last quarter of 2021 -
1) did DL lose money ?
2) American Express payments, refinery profits, and cargo revenues were way up?
3) The last quarter results do not include any government PSP funds?
 
jbs2886
Posts: 3668
Joined: Wed Apr 01, 2015 9:07 pm

Re: Delta Announces Q4 '21 Financial Results

Thu Jan 13, 2022 6:17 pm

MohawkWeekend wrote:
1) did DL lose money ?


If you're referring to Q4, yes and no. Yes when you include accounting adjustments (just on paper), no it did not lose money operationally.

MohawkWeekend wrote:
2) American Express payments, refinery profits, and cargo revenues were way up?


Yes.

MohawkWeekend wrote:
3) The last quarter results do not include any government PSP funds?


Correct.
 
User avatar
BWIAirport
Posts: 1152
Joined: Thu Jun 23, 2016 10:29 pm

Re: Delta Announces Q4 '21 Financial Results

Thu Jan 13, 2022 6:26 pm

majano wrote:
For whatever reason, Delta compares its balance sheet items to 2020. Of note on the balance sheet are:
~ Non-current liabilities are down $6,654 from 2020 but up 65% from the 2019 figure of $28,970. Interest expense reared up to $1,279 from $301 because of this.
~ Cash is down to $7,933 from $8,307
~ Cash from operating activities was $555, down from the 2019 figure of $969.

Balance Sheet items are less fluid than operations and are more accurately compared year-over-year even in a year with externalities, like 2020. It is more relevant to the company to compare assets and obligations to the most recent set of prior period data.

Speaking to the speed of the release, these figures are unaudited. Though the figures are usually not expected to change much, the full audited 10-K should be out mid-February once EY completes their audit. I'm not sure why other airlines take so long for Q4 data, but it could very well be because they wait until the audited statements are prepared.
 
x1234
Posts: 1227
Joined: Mon Nov 28, 2016 3:50 pm

Re: Delta Announces Q4 '21 Financial Results

Thu Jan 13, 2022 7:12 pm

How are the Pacific load factors and JV with KE turning out? I believe Pacific is the weakest DL region this quarter.
 
PSU.DTW.SCE
Posts: 9116
Joined: Mon Jan 28, 2002 11:45 am

Re: Delta Announces Q4 '21 Financial Results

Thu Jan 13, 2022 7:18 pm

It not even worth really trying to draw anything meaningful from TPAC and JV performance as demand is still remains nearly non-existant due to the pandemic.
Revenue is only at 19% of 2019 level. Its weak for everyone as Japan and China are still essentially closed.
 
majano
Topic Author
Posts: 429
Joined: Sun Oct 14, 2018 10:45 am

Re: Delta Announces Q4 '21 Financial Results

Thu Jan 13, 2022 7:26 pm

x1234 wrote:
How are the Pacific load factors and JV with KE turning out? I believe Pacific is the weakest DL region this quarter.

Load factor of 78% in Q4 and 69% throughout 2021 is not broken down per region. Perhaps in the full 10-K it might be. I am particularly weak at analysing operations but I am comfortable to say that the Pacific has not always been Delta's strongest region.
 
MIflyer12
Posts: 10468
Joined: Mon Feb 18, 2013 11:58 pm

Re: Delta Announces Q4 '21 Financial Results

Thu Jan 13, 2022 7:39 pm

majano wrote:
x1234 wrote:
How are the Pacific load factors and JV with KE turning out? I believe Pacific is the weakest DL region this quarter.

Load factor of 78% in Q4 and 69% throughout 2021 is not broken down per region. Perhaps in the full 10-K it might be. I am particularly weak at analysing operations but I am comfortable to say that the Pacific has not always been Delta's strongest region.


Change in revenue (4Q21 vs. 4Q19) is reported by region. Pacific was off 81% vs. 4Q2019 on a 69% reduction in capacity. Atlantic was off 53%.

See the SEC 10-Q filing today.
 
MIflyer12
Posts: 10468
Joined: Mon Feb 18, 2013 11:58 pm

Re: Delta Announces Q4 '21 Financial Results

Thu Jan 13, 2022 7:54 pm

MohawkWeekend wrote:
Perhaps some one can help me understand about the last quarter of 2021 -
1) did DL lose money ?


Yes, it lost money on a GAAP basis. Some of the non-GAAP adjustments that jbs2886 is referring to were:

- losses from equity investments (where they hold 20% or more), -$232 million

- mark-to-market losses on investments (where they hold less than 20.0%), -$197 million

- the $1,250 payment per employee, costing $108 million

Overall, DL's equity investments of the last decade have had just tragic performance.

I would encourage anybody looking at U.S. carrier financials to look beyond Operating Income because that doesn't include interest expense on the vast mounds of debt carriers have accrued since the start of Covid. DL's operating income was completely consumed by interest expense -- and then those items mentioned above (and some smaller non-operating items + -) drove them to a $395 million pre-tax loss.

Some other U.S. carriers are going to do worse -- but that fact doesn't provide cash flow for the ~250 new aircraft on order.
 
majano
Topic Author
Posts: 429
Joined: Sun Oct 14, 2018 10:45 am

Re: Delta Announces Q4 '21 Financial Results

Thu Jan 13, 2022 7:58 pm

MIflyer12 wrote:
majano wrote:
x1234 wrote:
How are the Pacific load factors and JV with KE turning out? I believe Pacific is the weakest DL region this quarter.

Load factor of 78% in Q4 and 69% throughout 2021 is not broken down per region. Perhaps in the full 10-K it might be. I am particularly weak at analysing operations but I am comfortable to say that the Pacific has not always been Delta's strongest region.


Change in revenue (4Q21 vs. 4Q19) is reported by region. Pacific was off 81% vs. 4Q2019 on a 69% reduction in capacity. Atlantic was off 53%.

See the SEC 10-Q filing today.

The Pacific numbers are not encouraging at all, the only positive is the 61% uptick in unit revenue. But as a fellow poster noted above, it's a problem for everyone. We will have to wait for the United numbers for a better informed assessment. United has historically shown better Pacific results.
 
MohawkWeekend
Posts: 1220
Joined: Tue Jan 08, 2019 2:06 pm

Re: Delta Announces Q4 '21 Financial Results

Thu Jan 13, 2022 8:27 pm

MIflyer12 wrote:
MohawkWeekend wrote:
Perhaps some one can help me understand about the last quarter of 2021 -
1) did DL lose money ?


Yes, it lost money on a GAAP basis. Some of the non-GAAP adjustments that jbs2886 is referring to were:

- losses from equity investments (where they hold 20% or more), -$232 million

- mark-to-market losses on investments (where they hold less than 20.0%), -$197 million

- the $1,250 payment per employee, costing $108 million

Overall, DL's equity investments of the last decade have had just tragic performance.

I would encourage anybody looking at U.S. carrier financials to look beyond Operating Income because that doesn't include interest expense on the vast mounds of debt carriers have accrued since the start of Covid. DL's operating income was completely consumed by interest expense -- and then those items mentioned above (and some smaller non-operating items + -) drove them to a $395 million pre-tax loss.

Some other U.S. carriers are going to do worse -- but that fact doesn't provide cash flow for the ~250 new aircraft on order.


Thanks for the detailed explanation. Hypothetical for you - with the refinery, cargo and American Express reimbursements the most profitable parts of Delta, could this be the reason DL has been the slowest to return capacity? Operate just the most profitable flights and enough of them so that people keep using the Delta branded credit card. Sell the surplus jet fuel from the refinery instead of burning it your self on money losing flights. Your thoughts?
 
MIflyer12
Posts: 10468
Joined: Mon Feb 18, 2013 11:58 pm

Re: Delta Announces Q4 '21 Financial Results

Thu Jan 13, 2022 8:48 pm

MohawkWeekend wrote:
Thanks for the detailed explanation. Hypothetical for you - with the refinery, cargo and American Express reimbursements the most profitable parts of Delta, could this be the reason DL has been the slowest to return capacity? Operate just the most profitable flights and enough of them so that people keep using the Delta branded credit card. Sell the surplus jet fuel from the refinery instead of burning it your self on money losing flights. Your thoughts?


No, I wouldn't interpret things quite that way. DL is way past the 'Don't fly empty airplanes' phase of the pandemic.

I had been wondering which U.S. carriers would be able to make money (GAAP net income) on 75-80% of 2019 revenues (by quarter). DL, AS and WN are still my bets. If you get into the 10-Q, though, you'll find that it's not just domestic capacity down, and domestic load factors down: domestic yields are down, too. It's going to be hard to make money in that environment. Carriers that didn't have stong margins pre-Covid, and/or did not/do not exercise strong expense control may be in for several more quarters of losses.

As for letting other segments carry the business as reasons for not adding capacity faster... if they thought they had more profitable flying they would surely add it. Just leveraging the fixed expenses (aircraft/gates/corporate staff) is a powerful reason to fly more, as AA and WN tried from the start (in clear contrast to DL and UA). I'd love to see aircraft utilization by type compared to 2018/2019 by quarter. I suspect they have the planes. They may (still) not have the pilots retrained on the available types.
 
PSU.DTW.SCE
Posts: 9116
Joined: Mon Jan 28, 2002 11:45 am

Re: Delta Announces Q4 '21 Financial Results

Thu Jan 13, 2022 9:04 pm

Buried in the investor / capital markets day presentation, there was a few points that relate to that.

In 2021, DL aircraft utilization was 87% efficiency compared to 2019 utilization, measures as block hour per aircraft.
Same ratio for workforce productivity. So yes, they are running less utilization overall per active aircraft.
Thats easy to see in the current schedules as widebodies doing domestic turns get less block hours that long-haul flights, the operating day is overall compressed (fewer really early and really late flights), reduced red eyes, long turn times, etc.
Also buried in there was that DL plans to reactive ~40 aircraft in 2022.

Q1 was always going to be notoriously soft, and amplified currently with Omnicron and further supression of business travel currently, so we won't return to more stable demand until we transition into Spring Break travel kicking off around Presidents Day weekend.
 
SEAorPWM
Posts: 32
Joined: Fri Jun 11, 2021 8:41 pm

Re: Delta Announces Q4 '21 Financial Results

Thu Jan 13, 2022 11:07 pm

This year isn't looking much better than last year.
 
jbs2886
Posts: 3668
Joined: Wed Apr 01, 2015 9:07 pm

Re: Delta Announces Q4 '21 Financial Results

Thu Jan 13, 2022 11:18 pm

SEAorPWM wrote:
This year isn't looking much better than last year.


Well their projections look much better.
 
bigb
Posts: 1613
Joined: Fri Nov 07, 2003 4:30 pm

Re: Delta Announces Q4 '21 Financial Results

Thu Jan 13, 2022 11:24 pm

Pacific is going to be in the tank, the only shining spot in my opinion would be flying to ICN. Even then that wasn’t great. Demand is in the toilet going to other places in the pacific. I do t see United doing much better either, but they been running more Cargo only flights.
 
LexPassenger
Posts: 83
Joined: Fri Dec 08, 2000 11:36 am

Re: Delta Announces Q4 '21 Financial Results

Fri Jan 14, 2022 3:20 am

The financial press is mostly reporting the adjusted results ($170 million profit) and the stock price is up today.

If you don't speak Accounting, I think that is the useful information.

Also notable was the return to modest profit-sharing, which requires at least a pretense of profit.
 
SteelChair
Posts: 1793
Joined: Fri Aug 25, 2017 11:37 am

Re: Delta Announces Q4 '21 Financial Results

Fri Jan 14, 2022 10:19 am

If the Pacific is the weakest market world wide, perhaps Delta's relative weakness in tbe Pacific is, paradoxically, an advantage?
 
TWFlyGuy
Posts: 487
Joined: Mon Apr 17, 2017 5:10 pm

Re: Delta Announces Q4 '21 Financial Results

Fri Jan 14, 2022 12:32 pm

SteelChair wrote:
If the Pacific is the weakest market world wide, perhaps Delta's relative weakness in the Pacific is, paradoxically, an advantage?


Weak compared to United, absolutely. Compared to AA, not so much. The question is if they can re-deploy the assets (aircraft in a profitable way to the Atlantic/Latin markets? UA & AA are benefiting from ordering 787's that aren't being delivered and thus don't have to be re-deployed. Maybe DL can find some markets that their 330's/350's & 767's can fly to from non-hub cities. Can STL, given the recent LH announcement of STL-FRA, sustain a nonstop CDG flight for example. If they can redeploy the assets, I think that can get them to where they need to be. There's also the traditional stuff they've done with widebodies that they moved away from like flooding MCO, FLL & MIA with them but that was for cruises which are still trying to rebound.
 
Detroit313
Posts: 715
Joined: Thu Dec 14, 2017 2:56 pm

Re: Delta Announces Q4 '21 Financial Results

Fri Jan 14, 2022 5:42 pm

LexPassenger wrote:
The financial press is mostly reporting the adjusted results ($170 million profit) and the stock price is up today.

If you don't speak Accounting, I think that is the useful information.

Also notable was the return to modest profit-sharing, which requires at least a pretense of profit.


The payment of $1,250 is not profit sharing. It is just an appreciation payment that is equal to all employees like other airlines have done.
 
panamair
Posts: 4483
Joined: Fri Oct 12, 2001 2:24 am

Re: Delta Announces Q4 '21 Financial Results

Fri Jan 14, 2022 6:11 pm

Detroit313 wrote:

The payment of $1,250 is not profit sharing. It is just an appreciation payment that is equal to all employees like other airlines have done.


Which other airlines have offered an appreciation payment to employees in the past year besides United? I am aware of UA’s $1000 payment but that’s about it…
 
LexPassenger
Posts: 83
Joined: Fri Dec 08, 2000 11:36 am

Re: Delta Announces Q4 '21 Financial Results

Fri Jan 14, 2022 6:18 pm

Ed Bastian, yesterday:

"we are happy to announce this morning a
special profit-sharing payment for all global employees"

Quacks. Walks. Duck.
 
Lootess
Posts: 750
Joined: Sun May 13, 2018 6:15 am

Re: Delta Announces Q4 '21 Financial Results

Fri Jan 14, 2022 6:50 pm

Detroit313 wrote:
LexPassenger wrote:
The financial press is mostly reporting the adjusted results ($170 million profit) and the stock price is up today.

If you don't speak Accounting, I think that is the useful information.

Also notable was the return to modest profit-sharing, which requires at least a pretense of profit.


The payment of $1,250 is not profit sharing. It is just an appreciation payment that is equal to all employees like other airlines have done.


It is, Ed said it himself and this has been happening regularly, just like in 2020 before the pandemic.
 
User avatar
DeltaMD90
Posts: 8949
Joined: Tue Apr 15, 2008 11:25 pm

Re: Delta Announces Q4 '21 Financial Results

Fri Jan 14, 2022 8:44 pm

LexPassenger wrote:
Ed Bastian, yesterday:

"we are happy to announce this morning a
special profit-sharing payment for all global employees"

Quacks. Walks. Duck.

But it doesn't walk and quack like a duck. Profit sharing is and has always been based of profits for the entire year.

DL did not make a profit in 2021. They did, however, make profits for part of the year and has decided to give some money anyway, something it was not required to do.

So no, it's not a duck
 
Cactusjuba
Posts: 297
Joined: Thu Dec 14, 2017 8:06 am

Re: Delta Announces Q4 '21 Financial Results

Fri Jan 14, 2022 8:56 pm

Lootess wrote:
Detroit313 wrote:
LexPassenger wrote:
The financial press is mostly reporting the adjusted results ($170 million profit) and the stock price is up today.

If you don't speak Accounting, I think that is the useful information.

Also notable was the return to modest profit-sharing, which requires at least a pretense of profit.


The payment of $1,250 is not profit sharing. It is just an appreciation payment that is equal to all employees like other airlines have done.


It is, Ed said it himself and this has been happening regularly, just like in 2020 before the pandemic.


No, it is NOT technically profit sharing, it’s a “thank you” bonus due to the meltdown/Covid, etc. The timing of announcing this coincides with traditional profit sharing with the release of annual financials (annual PTIX profits). Because employees are bummed they won’t get the bonus their accustomed to getting pre-COVID, there’s great inertia in surprising everyone with cash bonus they’d not expect otherwise; “profit sharing for 3Q & 4Q.” The real profit sharing is codified contractually with DALPA, copied for other workgroups, and the amount is determined as a % of an employee’s annual earnings. It didn’t happen this year because minus out the Cares Act money, there was no profit for fiscal year 2021.
 
F9Animal
Posts: 4670
Joined: Thu Dec 16, 2004 7:13 am

Re: Delta Announces Q4 '21 Financial Results

Sat Jan 15, 2022 1:22 am

DeltaMD90 wrote:
LexPassenger wrote:
Ed Bastian, yesterday:

"we are happy to announce this morning a
special profit-sharing payment for all global employees"

Quacks. Walks. Duck.

But it doesn't walk and quack like a duck. Profit sharing is and has always been based of profits for the entire year.

DL did not make a profit in 2021. They did, however, make profits for part of the year and has decided to give some money anyway, something it was not required to do.

So no, it's not a duck


Exactly!! I think it speaks volumes about a leader when he is willing to treat it's workers for their hard work. As for the Pacific numbers. It will come back eventually to levels that will bring Delta back to full health. Hopefully sooner than later.
 
LexPassenger
Posts: 83
Joined: Fri Dec 08, 2000 11:36 am

Re: Delta Announces Q4 '21 Financial Results

Sat Jan 15, 2022 2:43 am

DeltaMD90 wrote:
So no, it's not a duck


Delta Air Lines Announces December Quarter and Full Year 2021 Financial Results

Corporate Communications
404-715-2554
[email protected]

"Special profit-sharing payment. This adjustment is exclusive to 2021. To recognize the extraordinary efforts of our employees through the
pandemic, we will make a special profit-sharing payment to eligible employees in February 2022, based on the adjusted pre-tax profit
earned during the second half of 2021."
 
User avatar
DeltaMD90
Posts: 8949
Joined: Tue Apr 15, 2008 11:25 pm

Re: Delta Announces Q4 '21 Financial Results

Sat Jan 15, 2022 3:40 am

LexPassenger wrote:
DeltaMD90 wrote:
So no, it's not a duck


Delta Air Lines Announces December Quarter and Full Year 2021 Financial Results

Corporate Communications
404-715-2554
[email protected]

"Special profit-sharing payment. This adjustment is exclusive to 2021. To recognize the extraordinary efforts of our employees through the
pandemic, we will make a special profit-sharing payment to eligible employees in February 2022, based on the adjusted pre-tax profit
earned during the second half of 2021."

I'm not really sure why there is confusion here. Doesn't the word "special" indicate that this is different?

Under normal circumstances, there would be no profit sharing. Maybe we are arguing two different things? Yes, it's called "special profit sharing," but it's completely different. Additionally, it's one flat rate for everyone, not based off a percentage.

If Delta paid $0 to everyone this year, no one would have said anything. No one was expecting anything. That's because this is not how Delta's profit sharing has been done the past several years
 
majano
Topic Author
Posts: 429
Joined: Sun Oct 14, 2018 10:45 am

Re: Delta Announces Q4 '21 Financial Results

Thu Jan 20, 2022 10:41 am

MIflyer12 wrote:
majano wrote:
x1234 wrote:
How are the Pacific load factors and JV with KE turning out? I believe Pacific is the weakest DL region this quarter.

Load factor of 78% in Q4 and 69% throughout 2021 is not broken down per region. Perhaps in the full 10-K it might be. I am particularly weak at analysing operations but I am comfortable to say that the Pacific has not always been Delta's strongest region.


Change in revenue (4Q21 vs. 4Q19) is reported by region. Pacific was off 81% vs. 4Q2019 on a 69% reduction in capacity. Atlantic was off 53%.

See the SEC 10-Q filing today.

United numbers are out and are being discussed here: viewtopic.php?f=3&t=1469409
Their Pacific 4Q '21 revenue of $182 is off 83% vs 4Q '19 ($1,088). Capacity as measured by ASM was down 73%. So this region seems to have been unfavourable for both DL and UA.
Overall DL did somewhat better on the income statement with an operating profit of $1,886 vs an operating loss of $1022 at UA. removing government grants of $4,512 at DL and $4,000 at UA leaves both with operating losses (-$2,626 DL and -$5,022 UA).
On the balance sheet UA did much better in my view. Although DL reduced debt, they came from a much higher mountain in 2020. UA ended 2021 with a lower (than DL) total debt of $63,146 of which $44,842 is non-current, DL ended the year with total debt of $68,837 of which $47,881 is non-current. DL seems to be reducing debt, whether it is timely or too early (with Covid-19 variants waxing and waning) remains to be seen.

United increased its cash and cash equivalents to $18,283 (from $11,269 in 2020) whilst DL cash deteriorated to $7,933 (from $8,307 in 2020). UA seems to be building up a cash buffer by increasing debt.
 
MIflyer12
Posts: 10468
Joined: Mon Feb 18, 2013 11:58 pm

Re: Delta Announces Q4 '21 Financial Results

Thu Jan 20, 2022 12:39 pm

majano wrote:

On the balance sheet UA did much better in my view. Although DL reduced debt, they came from a much higher mountain in 2020. UA ended 2021 with a lower (than DL) total debt of $63,146 of which $44,842 is non-current, DL ended the year with total debt of $68,837 of which $47,881 is non-current. DL seems to be reducing debt, whether it is timely or too early (with Covid-19 variants waxing and waning) remains to be seen.

United increased its cash and cash equivalents to $18,283 (from $11,269 in 2020) whilst DL cash deteriorated to $7,933 (from $8,307 in 2020). UA seems to be building up a cash buffer by increasing debt.


That's why analysts focus on net debt, not total debt.
 
MohawkWeekend
Posts: 1220
Joined: Tue Jan 08, 2019 2:06 pm

Re: Delta Announces Q4 '21 Financial Results

Thu Jan 20, 2022 1:34 pm

How much of this debt (for both carriers) will subject to rising interest rates? ( Weren't they were already paying near junk bond interest rates before?)
Will this have a material effect and how soon would you see that?
 
majano
Topic Author
Posts: 429
Joined: Sun Oct 14, 2018 10:45 am

Re: Delta Announces Q4 '21 Financial Results

Thu Jan 20, 2022 2:12 pm

MohawkWeekend wrote:
How much of this debt (for both carriers) will subject to rising interest rates? ( Weren't they were already paying near junk bond interest rates before?)
Will this have a material effect and how soon would you see that?

Generally speaking, the long-term debt bears interest whilst current debt, if settled within the terms agreed with your creditors, does not bear interest. Having reviewed the earnings press releases for the past few years, I don't think this split is disclosed in the immediate press release. Others can correct me. You will need the audited financial statements to get the exact break-down.

With regards to interest expense, Delta saw a substantial uptick to ($1,279) in 2021 vs 2019 ($301). United was $1,621 in 2021 and $598 in 2019. So United seems to be charging higher interest to their P&L than Delta. It could be interest rates favouring Delta, it may be other factors. Again you need a full set of afs to establish this.

Various edits for typos. I should use the phone rather than the laptop :(
 
LexPassenger
Posts: 83
Joined: Fri Dec 08, 2000 11:36 am

Re: Delta Announces Q4 '21 Financial Results

Thu Jan 20, 2022 2:17 pm

majano wrote:
DL ended the year with total debt of $68,837 of which $47,881 is non-current


Liabilities are not debt.

From Delta's results announcement last week: "The company had total debt and finance lease obligations of $26.9 billion with adjusted net debt of $20.6 billion at the end of December 2021."

Accounting is really a different language from English.
 
majano
Topic Author
Posts: 429
Joined: Sun Oct 14, 2018 10:45 am

Re: Delta Announces Q4 '21 Financial Results

Thu Jan 20, 2022 2:22 pm

MIflyer12 wrote:
majano wrote:

On the balance sheet UA did much better in my view. Although DL reduced debt, they came from a much higher mountain in 2020. UA ended 2021 with a lower (than DL) total debt of $63,146 of which $44,842 is non-current, DL ended the year with total debt of $68,837 of which $47,881 is non-current. DL seems to be reducing debt, whether it is timely or too early (with Covid-19 variants waxing and waning) remains to be seen.

United increased its cash and cash equivalents to $18,283 (from $11,269 in 2020) whilst DL cash deteriorated to $7,933 (from $8,307 in 2020). UA seems to be building up a cash buffer by increasing debt.


That's why analysts focus on net debt, not total debt.

I don't disagree with this, but I will point out here that "analysts" as in stock-pickers look at everything. Their spreadsheets are ridiculous. :D As accountants we often refer to net-debt in valuations and share sale/purchase transactions.
 
majano
Topic Author
Posts: 429
Joined: Sun Oct 14, 2018 10:45 am

Re: Delta Announces Q4 '21 Financial Results

Thu Jan 20, 2022 2:32 pm

LexPassenger wrote:
majano wrote:
DL ended the year with total debt of $68,837 of which $47,881 is non-current


Liabilities are not debt.

From Delta's results announcement last week: "The company had total debt and finance lease obligations of $26.9 billion with adjusted net debt of $20.6 billion at the end of December 2021."

Accounting is really a different language from English.

Thanks for this clarification. I will not argue because if I look at the non-current liabilities of Delta, they have items such as pension and related benefits ($6,364), Loyalty programs ($4,849) and non-current operating leases ($7,002), one can easily argue that it is not debt. (I hold a different view on this.) These liabilities are unlikely to bear actual interest but may have imputed or notional interest related to them.

Wit this clarification from you, it becomes easier to explain the higher interest charges at United vs Delta. United had long term debt o $30,361 in 2021 and as per above, Delta had only $26.9.
 
MohawkWeekend
Posts: 1220
Joined: Tue Jan 08, 2019 2:06 pm

Re: Delta Announces Q4 '21 Financial Results

Thu Jan 20, 2022 4:30 pm

So unless you looked at each of their loans and bonds, it would hard to figure out what the overall risk for each company is as rates go up.

What do you think could account for $7 billion in non-current operating leases?
 
majano
Topic Author
Posts: 429
Joined: Sun Oct 14, 2018 10:45 am

Re: Delta Announces Q4 '21 Financial Results

Thu Jan 20, 2022 5:16 pm

MohawkWeekend wrote:
So unless you looked at each of their loans and bonds, it would hard to figure out what the overall risk for each company is as rates go up.

What do you think could account for $7 billion in non-current operating leases?

These are ASC 842 liabilities. For more please refer to below. https://www2.deloitte.com/us/en/pages/a ... anies.html
Essentially, a lessee now has to record a liability for operating leases. In the past only leases meeting the requirements of a finance lease landed on the balance sheet.

Popular Searches On Airliners.net

Top Photos of Last:   24 Hours  •  48 Hours  •  7 Days  •  30 Days  •  180 Days  •  365 Days  •  All Time

Military Aircraft Every type from fighters to helicopters from air forces around the globe

Classic Airliners Props and jets from the good old days

Flight Decks Views from inside the cockpit

Aircraft Cabins Passenger cabin shots showing seat arrangements as well as cargo aircraft interior

Cargo Aircraft Pictures of great freighter aircraft

Government Aircraft Aircraft flying government officials

Helicopters Our large helicopter section. Both military and civil versions

Blimps / Airships Everything from the Goodyear blimp to the Zeppelin

Night Photos Beautiful shots taken while the sun is below the horizon

Accidents Accident, incident and crash related photos

Air to Air Photos taken by airborne photographers of airborne aircraft

Special Paint Schemes Aircraft painted in beautiful and original liveries

Airport Overviews Airport overviews from the air or ground

Tails and Winglets Tail and Winglet closeups with beautiful airline logos