Delta Air Lines Announces $549 Million Profit

ATLANTA, July 19 /PRNewswire-FirstCall/ -- Delta Air Lines (NYSE: DAL) today reported financial results for the June 2010 quarter. Key points include:

-- Delta's net income for the June 2010 quarter was $549 million, or $0.65 per diluted share, excluding special items(1). This is a $748 million improvement year over year. -- Delta's net income was $467 million, or $0.55 per diluted share, for the June 2010 quarter. -- Results include $90 million in profit sharing expense, in recognition of Delta employees' achievements toward meeting the company's financial targets. -- Delta generated more than $1 billion in operating cash flow and ended the June 2010 quarter with $6.0 billion in unrestricted liquidity.

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"Delta's profit this quarter is our best result in a decade and proof that our plan has positioned us well as the economy begins its recovery," said Richard Anderson, Delta's chief executive officer. "These results would not have been possible without the dedication and determination of Delta people. We're happy to recognize our employees' contributions with $90 million in profit sharing."

Revenue Environment

Delta's operating revenue grew $1.2 billion, or 17% in the June 2010 quarter compared to the 2009 quarter.

-- Passenger revenue increased 19%, or $1.1 billion, compared to the prior year period on 1% lower capacity. Passenger unit revenue (PRASM) increased 19.4%, driven by a 17% improvement in yield and a 1.9 point improvement in load factor. -- Cargo revenue increased 22%, or $38 million, on higher cargo volume and yield. -- Other, net revenue increased 3%, or $24 million, primarily due to increased baggage fees.

Comparisons of revenue-related statistics are as follows:

Increase (Decrease) 2Q10 versus 2Q09 ---------------- Change Unit Passenger Revenue 2Q10 ($M) YOY Revenue Yield Capacity --------- --- ------- ----- -------- Domestic $3,152 15.7% 14.1% 14.2% 1.4% Atlantic 1,358 19.4% 30.1% 25.1% (8.2)% Pacific 634 52.3% 36.2% 22.5% 11.8% Latin America 336 16.9% 11.9% 10.4% 4.5% --- Total mainline 5,480 20.0% 19.9% 17.3% 0.1% Regional 1,529 14.2% 19.4% 16.7% (4.4)% ----- Consolidated $7,009 18.7% 19.4% 16.7% (0.6)%

"We are seeing strong improvements in these early stages of the economic recovery and believe there's room for more revenue growth as the economy continues to stabilize," said Ed Bastian, Delta's president. "We anticipate double-digit year over year unit revenue gains for the September quarter."

Cost Performance

In the June 2010 quarter, Delta's operating expense increased $317 million year over year due to higher fuel price and profit sharing expense, which were partially offset by incremental merger cost synergies.

Consolidated unit cost (CASM(2)), excluding fuel expense, profit sharing and special items, was flat in the June 2010 quarter on a year-over-year basis, despite 1% lower capacity. Consolidated CASM increased 5% due to higher fuel price and profit sharing expense.

Fuel Price and Related Hedges

Delta hedged 51% of its fuel consumption for the June 2010 quarter, for an average fuel price(3) of $2.32 per gallon. The table below represents fuel hedges Delta had in place as of July 16, 2010:

3Q10 4Q10 2011 ---- ---- ---- Call options 29% 20% 21% Collars 16% 20% 7% Swaps 5% 10% 0% Total 50% 50% 28% --- --- --- Average crude call strike $82 $83 $85 Average crude collar cap 81 87 88 Average crude collar floor 72 75 74 Average crude swap 84 89 78

Liquidity Position

As of June 30, 2010, Delta had $6.0 billion in unrestricted liquidity, including $4.4 billion in cash and $1.6 billion in undrawn revolving credit facilities. During the quarter, the company prepaid its $914 million revolving credit facility, which is now fully undrawn and available for future cash needs.

Operating cash flow during the June 2010 quarter was $1 billion, driven by the company's profitability and advance ticket sales, and free cash flow was $778 million. In the June quarter, Delta contributed nearly $500 million to its pension plans and completed its required 2010 pension funding. Year to date, Delta has generated $2.0 billion in operating cash flow and $1.4 billion in free cash flow.

Capital expenditures during the quarter were $283 million, which included $154 million for investments in aircraft, parts and modifications.

Subsequent to the end of the quarter, Delta completed its $450 million 2010-1A enhanced equipment trust certificate (EETC) offering. The certificates will be secured by 22 aircraft that are currently included in Delta's 2000-1 EETC, which matures in November 2010, and two 777LR aircraft which were delivered in March 2010.

Total debt payments in the June 2010 quarter were $345 million, of which $70 million was paid before scheduled maturity. At June 30, Delta's adjusted net debt was $15.6 billion, an $800 million reduction from March 31, 2010.

"Delta exhibited strong cost performance this quarter as merger synergies and productivity offset cost pressures in the business. Synergies have exceeded our expectations and will be a key factor as we strive to keep our non-fuel unit costs flat for the full year," said Hank Halter, Delta's chief financial officer. "In addition, we continue to make excellent progress in delevering our balance sheet - generating nearly $800 million in free cash flow this quarter and reducing adjusted net debt to $15.6 billion."

Company Highlights

Delta has a strong commitment to employees, customers and the communities it serves. Key accomplishments in 2010 to date include:

-- Accruing $90 million in employee profit sharing, in recognition of the achievements of all Delta employees toward meeting the company's financial targets; -- Bolstering Delta's trans-Atlantic joint venture with Air France-KLM with the addition of Alitalia, Italy's flag carrier; -- Increasing Delta's global reach through alliance and codeshare partnerships, including plans to codeshare with GOL airlines, a Brazilian carrier, and the ten-year anniversary celebration of the SkyTeam global airline alliance with the addition of Vietnam Airlines and TAROM, Romania's flag carrier; -- Selling Mesaba and Compass Airlines, two wholly owned regional airline subsidiaries, to Pinnacle Airlines Corp. and Trans States Holdings, Inc., respectively; -- Obtaining approval from the U.S. Department of Transportation to offer customers nonstop service between Tokyo's Haneda Airport and Detroit and Los Angeles as well as between Sao Paulo, Brazil and Detroit; -- Furthering Delta's efforts to become the leading airline of New York with the launch of Delta Shuttle service between New York-LaGuardia and Chicago-O'Hare International airports; -- Committing to expand First Class availability to all domestic markets longer than 750 miles, or about two and one-half hours of flight time, beginning this fall; -- Allowing customers to book scheduled commercial flights and on-demand private jet service in a single transaction through Delta AirElite; -- Partnering with American Express to offer select Delta SkyMiles Credit Card members the opportunity to check a first bag free for up to nine people in the same reservation; and -- Raising $1 million for the Martin Luther King Jr. National Memorial in Washington, D.C. with the support of our employees and customers.

Special Items

Delta recorded special items totaling $82 million in the June 2010 quarter, including:

-- $46 million in merger-related expenses; and -- $36 million in asset impairment charges related to aircraft retirements.

Delta recorded $58 million in merger-related expense items in the June 2009 quarter.

September 2010 Quarter Guidance

Delta's projections for the September 2010 quarter are below.

3Q 2010 Forecast ---------------- Fuel price, including taxes and hedges $2.33 Operating margin 10 - 12% Capital expenditures $250 million Total liquidity at end of period $6.3 billion 3Q 2010 Forecast (compared to 3Q 2009) ----------------- Consolidated unit costs - excluding fuel expense and profit sharing Flat Mainline unit costs - excluding fuel expense and profit sharing Up 0 - 2% System capacity Up 0 - 2% Domestic Up 0 - 2% International Up 2 - 4% Mainline capacity Up 1 - 3% Domestic Up 1 - 3% International Up 2 - 4%

Other Matters

Included with this press release are Delta's unaudited Consolidated Statements of Operations for the three and six months ended June 30, 2010 and 2009; a statistical summary for those periods; selected balance sheet data as of June 30, 2010 and Dec. 31, 2009; and a reconciliation of certain non-GAAP financial measures.

About Delta

Delta Air Lines serves more than 160 million customers each year. With its unsurpassed global network, Delta and the Delta Connection carriers offer service to 369 destinations in 67 countries on six continents. Headquartered in Atlanta, Delta employs more than 70,000 employees worldwide and operates a mainline fleet of more than 700 aircraft. A founding member of the SkyTeam global alliance, Delta participates in the industry's leading trans-Atlantic joint venture with Air France-KLM and Alitalia. Including its worldwide alliance partners, Delta offers customers more than 13,000 daily flights, with hubs in Amsterdam, Atlanta, Cincinnati, Detroit, Memphis, Minneapolis-St. Paul, New York-JFK, Paris-Charles de Gaulle, Salt Lake City and Tokyo-Narita. The airline's service includes the SkyMiles frequent flier program, the world's largest airline loyalty program; the award-winning BusinessElite service; and more than 45 Delta Sky Clubs in airports worldwide. Customers can check in for flights, print boarding passes, check bags and review flight status at delta.com.

Endnotes

(1) Note A to the attached Consolidated Statements of Operations provides a reconciliation of non-GAAP financial measures used in this release and provides the reasons management uses those measures.

(2) Delta excludes from consolidated unit cost ancillary businesses which are not related to the generation of a seat mile, including aircraft maintenance and staffing services which Delta provides to third parties, Delta's vacation wholesale operations (MLT) and Delta's dedicated freighter operations through 2009. Similarly, Delta excludes from passenger unit revenues, and includes in other revenue, revenues Delta received for providing aircraft maintenance and staffing services to third parties, MLT and freighter operations through 2009. Management believes these classifications provide a more consistent and comparable reflection of Delta's consolidated operations.

(3) Delta's June 2010 quarter average fuel price of $2.32 per gallon reflects the consolidated cost per gallon for mainline and regional operations, including contract carrier operations, net of fuel hedge impact.

Forward-looking Statements

Statements in this news release that are not historical facts, including statements regarding our estimates, expectations, beliefs, intentions, projections or strategies for the future, 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, expectations, beliefs, intentions, projections and strategies reflected in or suggested by the forward-looking statements. These risks and uncertainties include, but are not limited to, the cost of aircraft fuel; the effects of the global recession; the effects of the global financial crisis; the impact of posting collateral in connection with our fuel hedge contracts; the impact that our indebtedness will have on our financial and operating activities and our ability to incur additional debt; the restrictions that financial covenants in our financing agreements will have on our financial and business operations; labor issues; the ability to realize the anticipated benefits of our merger with Northwest; the integration of the Delta and Northwest workforces; interruptions or disruptions in service at one of our hub airports; our increasing dependence on technology in our operations; our ability to retain management and key employees; the ability of our credit card processors to take significant holdbacks in certain circumstances; the effects of terrorist attacks; the effects of weather, natural disasters and seasonality on our business; 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 our Securities and Exchange Commission filings, including our Annual Report on Form 10-K for the fiscal year ended Dec. 31, 2009 and our report on Form 10-Q for the quarterly period ended March 31, 2010. Caution should be taken not to place undue reliance on our forward-looking statements, which represent our views only as of July 19, 2010, and which we have no current intention to update.

DELTA AIR LINES, INC. Consolidated Statements of Operations (Unaudited) Three Months Ended June 30, ------------------- (in millions, except per share data) 2010 2009 $Change % Change ---- ---- ------- -------- Operating Revenue: Passenger: Mainline $5,480 $4,564 $916 20% Regional carriers 1,529 1,339 190 14% ----- ----- --- Total passenger revenue 7,009 5,903 1,106 19% Cargo 211 173 38 22% Other, net 948 924 24 3% Total operating revenue 8,168 7,000 1,168 17% Operating Expense: Aircraft fuel and related taxes 1,960 1,812 148 8% Salaries and related costs 1,702 1,723 (21) -1% Contract carrier arrangements(1) 972 965 7 1% Aircraft maintenance materials and outside repairs 395 392 3 1% Depreciation and amortization 379 383 (4) -1% Contracted services 366 354 12 3% Passenger commissions and other selling expenses 377 329 48 15% Landing fees and other rents 324 315 9 3% Passenger service 165 161 4 2% Aircraft rent 101 119 (18) -15% Profit sharing 90 - 90 NM Restructuring and merger-related items 82 58 24 41% Other 403 388 15 4% Total operating expense 7,316 6,999 317 5% ----- ----- --- Operating Income 852 1 851 NM Other (Expense) Income: Interest expense (315) (324) 9 -3% Interest income 3 9 (6) -67% Miscellaneous, net (72) 61 (133) NM Total other expense, net (384) (254) (130) 51% ---- ---- ---- Income (Loss) Before Income Taxes 468 (253) 721 NM Income Tax Provision (1) (4) 3 NM --- --- --- Net Income (Loss) $467 $(257) $724 NM ==== ===== ==== Basic Earnings (Loss) per Share $0.56 $(0.31) ===== ====== Diluted Earnings (Loss) per Share $0.55 $(0.31) ===== ====== Basic Weighted Average Shares Outstanding 834 827 Diluted Weighted Average Shares Outstanding 842 827 (1) Contract carrier arrangements expense includes $282 million and $212 million for the three months ended June 30, 2010 and 2009, respectively, for aircraft fuel and related taxes. DELTA AIR LINES, INC. Consolidated Statements of Operations (Unaudited) Six Months Ended June 30, ---------------- (in millions, except per share data) 2010 2009 $Change % Change ---- ---- ------- -------- Operating Revenue: Passenger: Mainline $9,966 $8,931 $1,035 12% Regional carriers 2,849 2,573 276 11% ----- ----- --- Total passenger revenue 12,815 11,504 1,311 11% Cargo 387 358 29 8% Other, net 1,814 1,822 (8) -% Total operating revenue 15,016 13,684 1,332 10% Operating Expense: Aircraft fuel and related taxes 3,643 3,705 (62) -2% Salaries and related costs 3,374 3,429 (55) -2% Contract carrier arrangements(1) 1,889 1,873 16 1% Aircraft maintenance materials and outside repairs 769 816 (47) -6% Depreciation and amortization 764 767 (3) -% Contracted services 758 786 (28) -4% Passenger commissions and other selling expenses 741 685 56 8% Landing fees and other rents 637 631 6 1% Passenger service 303 296 7 2% Aircraft rent 213 240 (27) -11% Profit sharing 90 - 90 NM Restructuring and merger-related items 136 157 (21) -13% Other 779 781 (2) -% Total operating expense 14,096 14,166 (70) -% ------ ------ --- Operating Income (Loss) 920 (482) 1,402 NM Other (Expense) Income: Interest expense (641) (632) (9) 1% Interest income 23 19 4 21% Miscellaneous, net (80) 48 (128) NM Total other expense, net (698) (565) (133) 24% ---- ---- ---- Income (Loss) Before Income Taxes 222 (1,047) 1,269 NM Income Tax Provision (11) (4) (7) NM --- --- --- Net Income (Loss) $211 $(1,051) $1,262 NM ==== ======= ====== Basic Earnings (Loss) per Share $0.25 $(1.27) ===== ====== Diluted Earnings (Loss) per Share $0.25 $(1.27) ===== ====== Basic Weighted Average Shares Outstanding 833 826 Diluted Weighted Average Shares Outstanding 842 826 (1) Contract carrier arrangements expense includes $540 million and $407 million for the six months ended June 30, 2010 and 2009, respectively, for aircraft fuel and related taxes. DELTA AIR LINES, INC. Selected Balance Sheet Data June 30, December 31, (in millions) 2010 2009 ---- ---- (Unaudited) Cash and cash equivalents $4,434 $4,607 Short-term investments - 71 Restricted cash and cash equivalents (short- term and long-term) 447 444 Total assets 43,809 43,539 Total debt and capital leases, including current maturities 15,783 17,198 Total stockholders' equity 199 245 DELTA AIR LINES, INC. Combined Statistical Summary (Unaudited) Three Months Ended ------------ June 30, -------- 2010 2009 Change ---- ---- ------ Consolidated(1): Revenue Passenger Miles (millions) 49,894 49,053 1.7% Available Seat Miles (millions) 58,698 59,029 -0.6% Passenger Mile Yield (cents) 14.05 12.04 16.7% Passenger Revenue per Available Seat Mile (PRASM)(cents) 11.94 10.00 19.4% Operating Cost Per Available Seat Mile (CASM) (cents) 12.18 11.55 5.4% CASM excluding Special Items -See Note A (cents) 11.89 11.45 3.8% CASM excluding Special Items and Fuel Expense and Related Taxes (2) -See Note A (cents) 8.08 8.06 0.2% Passenger Load Factor 85.0% 83.1% 1.9 Fuel Gallons Consumed (millions) 965 983 -1.8% Average Price Per Fuel Gallon, Net of Hedging Activity $2.32 $2.06 12.6% Number of Aircraft in Fleet, End of Period 958 1,017 (59) Full-Time Equivalent Employees, End of Period 81,916 82,968 -1.3% Mainline: Revenue Passenger Miles (millions) 43,398 42,416 2.3% Available Seat Miles (millions) 50,642 50,605 0.1% Operating Cost Per Available Seat Mile (CASM) (cents) 11.19 10.62 5.4% CASM excluding Special Items -See Note A (cents) 10.85 10.51 3.2% CASM excluding Special Items and Fuel Expense and Related Taxes -See Note A (cents) 7.27 7.20 1.0% Fuel Gallons Consumed (millions) 782 793 -1.4% Average Price Per Fuel Gallon, Net of Hedging Activity $2.32 $2.14 8.4% Number of Aircraft in Fleet, End of Period 733 759 (26) 1 Except for full-time equivalent employees, data presented includes operations under our contract carrier arrangements. 2 Excludes $282 million and $212 million for the June 2010 and 2009 quarters, respectively, for fuel expense incurred under contract carrier arrangements. DELTA AIR LINES, INC. Combined Statistical Summary (Unaudited) Six Months Ended ---------------- June 30, -------- 2010 2009 Change ---- ---- ------ Consolidated(1): Revenue Passenger Miles (millions) 92,261 92,013 0.3% Available Seat Miles (millions) 111,999 114,769 -2.4% Passenger Mile Yield (cents) 13.89 12.50 11.1% Passenger Revenue per Available Seat Mile (PRASM) (cents) 11.44 10.02 14.2% Operating Cost Per Available Seat Mile (CASM) (cents) 12.31 12.02 2.4% CASM excluding Special Items -See Note A (cents) 12.11 11.88 1.9% CASM excluding Special Items and Fuel Expense and Related Taxes (2) -See Note A (cents) 8.38 8.35 0.4% Passenger Load Factor 82.4% 80.2% 2.2 Fuel Gallons Consumed (millions) 1,836 1,908 -3.8% Average Price Per Fuel Gallon, Net of Hedging Activity $2.28 $2.16 5.6% Number of Aircraft in Fleet, End of Period 958 1,017 (59) Full-Time Equivalent Employees, End of Period 81,916 82,968 -1.3% Mainline: Revenue Passenger Miles (millions) 79,929 79,617 0.4% Available Seat Miles (millions) 96,252 98,369 -2.2% Operating Cost Per Available Seat Mile (CASM) (cents) 11.26 11.14 1.1% CASM excluding Special Items -See Note A (cents) 11.04 10.99 0.4% CASM excluding Special Items and Fuel Expense and Related Taxes -See Note A (cents) 7.55 7.48 0.9% Fuel Gallons Consumed (millions) 1,479 1,533 -3.5% Average Price Per Fuel Gallon, Net of Hedging Activity $2.27 $2.28 -0.4% Number of Aircraft in Fleet, End of Period 733 759 (26) 1 Except for full-time equivalent employees, data presented includes operations under our contract carrier arrangements. 2 Excludes $540 million and $407 million for the June 2010 and 2009 quarters, respectively, for fuel expense incurred under contract carrier arrangements.

Note A: The following tables show reconciliations of non-GAAP financial measures. The reasons Delta uses these measures are described below.

-- We sometimes use information that is derived from our Condensed Consolidated Financial Statements, but that is not presented in accordance with accounting principles generally accepted in the U.S. ("GAAP"). Certain of this information is considered "non-GAAP financial measures" under the U.S. Securities and Exchange Commission rules. The non-GAAP financial measures should be considered in addition to results prepared in accordance with GAAP, but should not be considered a substitute for or superior to GAAP results. -- Delta is unable to reconcile certain forward-looking projections to GAAP, including projected consolidated non-fuel cost per available seat mile (CASM) and Mainline non-fuel CASM, as the nature or amount of special items cannot be estimated at this time. -- Delta excludes special items because management believes the exclusion of these items is helpful to investors to evaluate the company's recurring operational performance. -- Delta presents net capital expenditures because management believes this metric is helpful to investors to evaluate the company's investing activities. -- Delta presents total debt and capital lease payments because management believes this metric is helpful to investors to evaluate the company's debt-related activities. -- Delta presents free cash flow because management believes this metric is helpful to investors to evaluate the company's ability to generate cash. -- Delta uses adjusted total debt, including aircraft rent, in addition to long-term adjusted debt and capital leases, to present estimated financial obligations. Delta reduces adjusted total debt by cash and cash equivalents, to present the amount of additional assets needed to satisfy the debt. -- Delta presents consolidated and Mainline CASM excluding fuel expense and related taxes because management believes the volatility in fuel prices impacts the comparability of year-over-year financial performance. -- Consolidated and Mainline CASM excludes ancillary businesses not associated with the generation of a seat mile. These businesses include expenses related to Delta's providing aircraft maintenance and staffing services to third parties, Delta's vacation wholesale operations and its dedicated freighter operations through 2009. -- Delta excludes profit sharing expense from CASM because management believes the exclusion of this item provides a more meaningful comparison of the Company's CASM to the industry. Three Months Ended June 30, --------------------------- (in millions) 2010 2009 ---- ---- Net income (loss) $467 $(257) Item excluded: Restructuring and merger-related items 82 58 $549 $(199) Net income (loss) excluding special items ==== ===== Diluted weighted average shares outstanding 842 --- Income per share excluding special items $0.65 ===== Three Months Ended (in millions) June 30, 2010 ------------- Payment on long-term debt and capital lease obligations $(1,254) Adjustments: Pay down of revolving credit facility 914 Payments under seller financing (6) --- Total debt and capital lease payments $(346) ===== Three Months Ended (in millions) June 30, 2010 ------------- Flight equipment, including advance payments (GAAP) $(163) Ground property and equipment, including technology (GAAP) (33) Adjustments: Other investments (98) Payments under seller financing 6 Proceeds from sale of flight equipment 5 --- Total capital expenditures $(283) ===== Three Months Ended Six Months Ended June 30, 2010 June 30, 2010 ------------- ------------- (in millions) GAAP Net cash provided by operating activities $1,034 $2,000 GAAP Net cash used in investing activities (262) (555) Adjustments: Redemption of short term investments - (73) Aircraft purchases under seller financing - (21) Payments under seller financing 6 12 Total free cash flow $778 $1,363 ==== ====== (in billions) June 30, 2010 March 31, 2010 ------------- -------------- Debt and capital lease obligations $15.8 $16.9 Plus: unamortized discount, net from purchase accounting and fresh start reporting 1.0 1.1 --- --- Adjusted debt and capital lease obligations $16.8 $18.0 Plus: 7x last twelve months' aircraft rent 3.2 3.3 --- --- Adjusted total debt 20.0 21.3 Less: cash and cash equivalents (4.4) (4.9) ---- ---- Adjusted net debt 15.6 $16.4 ==== ===== Three Months Ended Six Months Ended June June 30, 30, ------------------ ---------------------- 2010 2009 2010 2009 ---- ---- ---- ---- CASM (cents) 12.46 11.86 12.59 12.34 Ancillary businesses (0.28) (0.31) (0.28) (0.32) ----- ----- ----- ----- CASM excluding items not related to generation of a seat mile (cents) 12.18 11.55 12.31 12.02 Items excluded: Profit sharing (0.15) - (0.08) - Restructuring and merger-related items (0.14) (0.10) (0.12) (0.14) ----- ----- ----- ----- CASM excluding profit sharing and special items (cents) 11.89 11.45 12.11 11.88 Fuel expense and related taxes (3.81) (3.39) (3.73) (3.53) ----- ----- ----- ----- CASM excluding fuel expense and related taxes, profit sharing and special items (cents) 8.08 8.06 8.38 8.35 ==== ==== ==== ==== Three Months Ended Six Months Ended June June 30, 30, ------------------ ---------------------- (in millions, except per cent data) 2010 2009 2010 2009 ---- ---- ---- ---- Consolidated operating expense $7,316 $6,999 $14,096 $14,166 Less regional carriers operating expense (1,505) (1,452) (2,987) (2,820) ------ ------ ------ ------ Mainline operating expense $5,811 $5,547 $11,109 $11,346 ====== ====== ======= ======= Mainline CASM (cents) 11.47 10.96 11.54 11.53 Ancillary businesses (0.28) (0.34) (0.28) (0.39) ----- ----- ----- ----- Mainline CASM excluding items not related to generation of a seat mile (cents) 11.19 10.62 11.26 11.14 Items excluded: Profit sharing (0.18) - (0.09) - Restructuring and merger-related items (0.16) (0.11) (0.13) (0.15) ----- ----- ----- ----- Mainline CASM excluding profit sharing and special items (cents) 10.85 10.51 11.04 10.99 Fuel expense and related taxes (3.58) (3.31) (3.49) (3.51) ----- ----- ----- ----- Mainline CASM excluding fuel expense and related taxes, profit sharing and special items (cents) 7.27 7.20 7.55 7.48 ==== ==== ==== ====

SOURCE Delta Air Lines