Delta(DAL) - 2025 Q1 - Quarterly Report

Financial Performance - Operating income for the March 2025 quarter was $569 million, a decrease of$ 45 million compared to the March 2024 quarter[73]. - Total revenue increased by $292 million, or 2%, to$ 14.04 billion, driven by demand for premium products and a 4% increase in capacity[74][81]. - Passenger revenue rose by $349 million, or 3%, to$ 11.48 billion, with premium products and loyalty travel awards contributing significantly[81]. - Total operating expenses increased by $337 million, or 3%, to$ 13.47 billion, primarily due to higher employee costs and increased landing fees[75][90]. - Revenue passenger miles (RPM) increased by 3% to 55,678 million in Q1 2025 from 54,207 million in Q1 2024[105]. - Total revenue per available seat mile (TRASM) decreased by 2% to 20.53 cents in Q1 2025 compared to 20.98 cents in Q1 2024[105]. - Adjusted TRASM for Q1 2025 was 18.97 cents, down from 19.17 cents in Q1 2024, reflecting a decrease of 1.04%[129]. - Free cash flow for Q1 2025 was $1,280 million, derived from net cash provided by operating activities of$ 2,378 million and net cash used in investing activities of $1,224 million[131]. Cash Flow and Liquidity - Cash flow from operating activities generated$ 2.4 billion, with total cash sales to American Express reaching $1.9 billion, a 13% increase year-over-year[77]. - Free cash flow for the March 2025 quarter was$ 1.3 billion, following $1.2 billion in cash used for investing activities[78]. - As of March 31, 2025, Delta had$ 6.8 billion in cash and undrawn credit facilities, ensuring liquidity for the next twelve months[110][111]. Fuel Expenses - The average price per gallon of fuel decreased to $2.45 from$ 2.81, contributing to a $188 million reduction in fuel expenses[93]. - Delta's average price per fuel gallon decreased by 11% to$ 2.47 in Q1 2025 from $2.79 in Q1 2024[105]. - Total fuel expense for Q1 2025 was$ 2,410 million, a decrease of 7.2% from $2,598 million in Q1 2024[128]. - Fuel expense represented approximately 18% of total operating expenses in Q1 2025, down from 20% in Q1 2024[114]. Capital Expenditures - Capital expenditures for Q1 2025 were$ 1.2 billion, with an expected total capital spend of approximately $5.0 billion for the year, primarily for aircraft and technology enhancements[119]. Employee Compensation - Delta paid$ 1.4 billion in profit sharing in February 2025 related to 2024 pre-tax profit, with an accrual of $124 million for Q1 2025[115][116]. - The company withheld a total of 1,155,756 shares from employees during Q1 2025 to satisfy tax obligations[139]. Tax and Regulatory Information - The company projects an annual effective tax rate for 2025 between 24% and 26%[100]. - The company made no changes to its internal control over financial reporting that materially affected its financial reporting[135]. - There were no material changes in market risk from the previous disclosures in the Form 10-K[133]. - The company did not report any material changes in legal proceedings from the previous Form 10-K[136]. Refinery Segment Performance - Refinery segment generated operating revenue of$ 1.698 billion for the three months ended March 31, 2025, a decrease of $351 million compared to$ 2.049 billion in 2024[104]. - Operating loss for the refinery segment was $1 million in Q1 2025, down from operating income of$ 49 million in Q1 2024, primarily due to lower pricing of refined products[104]. Cost Metrics - CASM-Ex for Q1 2025 was 14.44 cents, slightly up from 14.08 cents in Q1 2024, indicating an increase of 2.55%[130]. - Adjusted CASM for Q1 2025 was 19.69 cents, down from 20.04 cents in Q1 2024, reflecting a decrease of 1.75%[130].