Delta(DAL) - 2025 Q2 - Quarterly Report

Part I. Financial Information This section presents the company's financial statements, management's discussion and analysis, and disclosures on market risk and controls Financial Statements This section presents Delta's unaudited condensed consolidated financial statements, detailing financial position and performance for Q2 and H1 2025 Consolidated Balance Sheets This section provides a snapshot of Delta's financial position, detailing assets, liabilities, and equity as of June 30, 2025 Consolidated Balance Sheet Highlights (in millions) | Account | June 30, 2025 | December 31, 2024 | | :--- | :--- | :--- | | Total Assets | $78,395 | $75,372 | | Total current assets | $10,982 | $9,844 | | Property and equipment, net | $38,926 | $37,595 | | Total Liabilities | $60,955 | $60,079 | | Air traffic liability | $8,893 | $7,094 | | Total debt and finance leases | $15,056 | $16,194 | | Total Stockholders' Equity | $17,440 | $15,293 | Statements of Operations This section details Delta's financial performance, including revenues, expenses, and net income for Q2 and H1 2025 Q2 2025 vs Q2 2024 Performance (in millions, except per share data) | Metric | Q2 2025 | Q2 2024 | | :--- | :--- | :--- | | Total operating revenue | $16,648 | $16,658 | | Total operating expense | $14,546 | $14,391 | | Operating Income | $2,102 | $2,267 | | Net Income | $2,130 | $1,305 | | Diluted Earnings Per Share | $3.27 | $2.01 | H1 2025 vs H1 2024 Performance (in millions, except per share data) | Metric | H1 2025 | H1 2024 | | :--- | :--- | :--- | | Total operating revenue | $30,688 | $30,406 | | Total operating expense | $28,017 | $27,525 | | Operating Income | $2,671 | $2,881 | | Net Income | $2,370 | $1,342 | | Diluted Earnings Per Share | $3.63 | $2.08 | Statements of Cash Flows This section outlines Delta's cash inflows and outflows from operating, investing, and financing activities for H1 2025 Cash Flow Summary for Six Months Ended June 30 (in millions) | Cash Flow Category | 2025 | 2024 | | :--- | :--- | :--- | | Net Cash Provided by Operating Activities | $4,235 | $4,857 | | Net cash used in investing activities | ($2,423) | ($1,446) | | Net cash used in financing activities | ($1,704) | ($2,299) | | Net Increase in Cash | $108 | $1,112 | Notes to Financial Statements These notes provide detailed disclosures on accounting policies, significant transactions, and segment performance - Total cash sales from marketing agreements related to the loyalty program were $4.0 billion for the six months ended June 30, 2025, up from $3.6 billion in the same period of 2024[38] - Total debt decreased from $15.3 billion at the end of 2024 to $14.4 billion as of June 30, 2025. In June 2025, the company issued $2.0 billion in new unsecured notes to repay a higher-cost PSP loan and for general corporate purposes[52][53] - As of June 30, 2025, the company had future aircraft purchase commitments of approximately $16.8 billion for 275 aircraft, with deliveries scheduled through 2029 and beyond[62][65] - The refinery segment reported an operating loss of $10 million for the six months ended June 30, 2025, a decrease from the $108 million operating income in the same period of 2024[73] Management's Discussion and Analysis (MD&A) Management discusses Delta's financial performance, condition, and liquidity, highlighting key drivers and strategic initiatives for Q2 and H1 2025 Q2 2025 Financial Highlights This section summarizes Delta's key financial performance metrics for the second quarter of 2025, including income, revenue, expenses, and liquidity - Operating income for Q2 2025 was $2.1 billion, a decrease of $165 million compared to Q2 2024[79] - Total revenue was flat, with an increase in premium product and loyalty revenue offset by a decline in main cabin demand due to macroeconomic uncertainty[80] - Total operating expense increased by 1% ($155 million) YoY, driven by higher wages and landing fees, but partially offset by lower fuel costs. Non-fuel unit cost (CASM-Ex) increased 2.7%[81][82] - Total liquidity stood at $6.4 billion as of June 30, 2025. The company generated $733 million in free cash flow during the quarter[82][84] Results of Operations This section analyzes Delta's operating revenue and expense trends for Q2 and H1 2025, highlighting key drivers by product, region, and cost category Q2 2025 vs Q2 2024 Passenger Revenue by Product (in millions) | Product | Q2 2025 | Q2 2024 | % Change | | :--- | :--- | :--- | :--- | | Ticket - Main cabin | $6,347 | $6,716 | (5)% | | Ticket - Premium products | $5,899 | $5,633 | 5% | | Loyalty travel awards | $1,092 | $975 | 12% | Q2 2025 vs Q2 2024 Passenger Revenue Change by Region | Region | Revenue Change | Capacity (ASM) Change | | :--- | :--- | :--- | | Domestic | (1)% | 4% | | Atlantic | 2% | 4% | | Latin America | (1)% | (1)% | | Pacific | 11% | 11% | Q2 2025 vs Q2 2024 Key Operating Expenses (in millions) | Expense Category | Q2 2025 | Q2 2024 | % Change | | :--- | :--- | :--- | :--- | | Salaries and related costs | $4,402 | $4,012 | 10% | | Aircraft fuel and related taxes | $2,458 | $2,813 | (13)% | | Landing fees and other rents | $878 | $766 | 15% | Financial Condition and Liquidity This section details Delta's financial position, liquidity, cash flow generation, debt management, and capital allocation strategies as of June 30, 2025 - Total liquidity as of June 30, 2025 was $6.4 billion, which includes cash, cash equivalents, short-term investments, and $3.1 billion available under revolving credit facilities[123][124] - In H1 2025, net cash from operations was $4.2 billion. Capital expenditures were $2.4 billion, with a full-year forecast of approximately $5.0 billion[125][132] - The company repaid $3.5 billion of debt and finance lease obligations in H1 2025. In June 2025, it issued $2.0 billion in new, lower-rate unsecured notes to repay a PSP loan[133][134] - The Board of Directors increased the quarterly dividend to $0.1875 per share and authorized a new $1.0 billion share repurchase program, open through June 2028[137] Fleet Information This section provides an overview of Delta's mainline and regional aircraft fleet, including current count, average age, and future purchase commitments Mainline Fleet Summary as of June 30, 2025 | Category | Count | | :--- | :--- | | Total Mainline Aircraft | 980 | | Average Fleet Age (Years) | 14.8 | | Aircraft Purchase Commitments | 275 | | Aircraft Purchase Options | 120 | - The company has 275 mainline aircraft on order, including 100 B-737-10, 79 A321-200neo, and 67 A220-300 aircraft[65][121] - In addition to the mainline fleet, regional carriers operate 322 aircraft on behalf of Delta[122] Market Risk Disclosures The company states that there have been no material changes in its market risk exposures from the information provided in its Annual Report on Form 10-K for the year ended December 31, 2024 - There have been no material changes in market risk from the disclosures in the 2024 Form 10-K[149] Controls and Procedures Management, including the CEO and CFO, evaluated the company's disclosure controls and procedures and concluded they were effective as of June 30, 2025. No material changes were made to the internal control over financial reporting during the quarter - Management concluded that disclosure controls and procedures were effective as of June 30, 2025[150] - No material changes were made to internal controls over financial reporting during the second quarter of 2025[151] Part II. Other Information This section provides updates on legal proceedings, risk factors, and equity-related activities not covered in the financial statements Legal Proceedings The company reports no material changes from the legal proceedings that were described in its 2024 Annual Report on Form 10-K - There have been no material changes from the legal proceedings described in the 2024 Form 10-K[152] Risk Factors The company states that there have been no material changes to the risk factors previously disclosed in its 2024 Annual Report on Form 10-K - There have been no material changes from the risk factors described in the 2024 Form 10-K[153] Share Repurchases and Equity Sales This section details the authorization of a new share repurchase program and other equity-related activities during the second quarter of 2025 - In the June 2025 quarter, the Board of Directors authorized a $1.0 billion opportunistic share repurchase program, valid through June 30, 2028[155] - No shares were repurchased under the new program in the June 2025 quarter[155]