-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, QmTTH+jUR7hq6vpiton844iu0COFSRGl0ySblaWw79LfHtpWvKxW84blAFfNHnwz 3wp4r4DrDCu32+oGj/Ws7w== 0000950144-06-004894.txt : 20060512 0000950144-06-004894.hdr.sgml : 20060512 20060511191426 ACCESSION NUMBER: 0000950144-06-004894 CONFORMED SUBMISSION TYPE: 8-K PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 20060511 ITEM INFORMATION: Results of Operations and Financial Condition ITEM INFORMATION: Financial Statements and Exhibits FILED AS OF DATE: 20060512 DATE AS OF CHANGE: 20060511 FILER: COMPANY DATA: COMPANY CONFORMED NAME: DELTA AIR LINES INC /DE/ CENTRAL INDEX KEY: 0000027904 STANDARD INDUSTRIAL CLASSIFICATION: AIR TRANSPORTATION, SCHEDULED [4512] IRS NUMBER: 580218548 STATE OF INCORPORATION: DE FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 8-K SEC ACT: 1934 Act SEC FILE NUMBER: 001-05424 FILM NUMBER: 06831846 BUSINESS ADDRESS: STREET 1: HARTSFIELD ATLANTA INTL AIRPORT STREET 2: 1030 DELTA BLVD CITY: ATLANTA STATE: GA ZIP: 30354-1989 BUSINESS PHONE: 4047152600 MAIL ADDRESS: STREET 1: P.O. BOX 20706 STREET 2: DEPT 981 CITY: ATLANTA STATE: GA ZIP: 30320-6001 FORMER COMPANY: FORMER CONFORMED NAME: DELTA AIR CORP DATE OF NAME CHANGE: 19660908 8-K 1 g01542e8vk.htm DELTA AIR LINES, INC. DELTA AIR LINES, INC.
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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 OR 15(d) of the
Securities Exchange Act of 1934
Date of Report (Date of earliest event reported): May 11, 2006
DELTA AIR LINES, INC.
 
(Exact name of registrant as specified in its charter)
         
Delaware   001-05424   58-0218548
         
(State or other jurisdiction   (Commission   (IRS Employer
of incorporation)   File Number)   Identification No.)
P.O. Box 20706, Atlanta, Georgia 30320-6001
(Address of principal executive offices)
Registrant’s telephone number, including area code: (404) 715-2600
Registrant’s Web site address: www.delta.com
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below):
o Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
o Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
o Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
o Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

 

TABLE OF CONTENTS

Item 2.02 Results of Operations and Financial Condition.
Item 9.01 Financial Statements and Exhibits.
SIGNATURES
EXHIBIT INDEX
PRESS RELEASE DATED MAY 11, 2006

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Item 2.02 Results of Operations and Financial Condition.
Delta Air Lines, Inc. (Delta) today issued a press release reporting financial results for the quarter ended March 31, 2006. The press release is furnished as Exhibit 99.1. The information furnished in this Form 8-K shall not be deemed incorporated by reference into any other filing with the Securities and Exchange Commission.
Item 9.01 Financial Statements and Exhibits.
(c) Exhibits.
     
Exhibit 99.1  
Press Release dated May 11, 2006 titled “Delta Air Lines Reports Results for March 2006 Quarter”

 

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SIGNATURES
     Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
         
  DELTA AIR LINES, INC.
 		  
  By:   /s/ Edward H. Bastian    
Date: May 11, 2006    Edward H. Bastian   
    Executive Vice President and Chief Financial Officer   

 

Table of Contents

         
EXHIBIT INDEX
     
Exhibit Number   Description
Exhibit 99.1  
Press Release dated May 11, 2006 titled “Delta Air Lines Reports Results for March 2006 Quarter”

 

EX-99.1 2 g01542exv99w1.txt PRESS RELEASE DATED MAY 11, 2006 Exhibit 99.1 CONTACT: Investor Relations 404-715-6679 Corporate Communications 404-715-2554 DELTA AIR LINES REPORTS RESULTS FOR MARCH 2006 QUARTER ATLANTA, May 11, 2006 -- Delta Air Lines (Other OTC: DALRQ) today reported results for the quarter ended March 31, 2006. Key points include: o DELTA'S FIRST QUARTER NET LOSS WAS $2.1 BILLION. EXCLUDING REORGANIZATION AND SPECIAL ITEMS, THE FIRST QUARTER NET LOSS WAS $356 MILLION. (1,2) o IN APRIL, DELTA REACHED A TENTATIVE AGREEMENT WITH ITS PILOT UNION ON CONTRACTUAL CHANGES DESIGNED TO DELIVER $280 MILLION IN AVERAGE ANNUAL PILOT LABOR COST SAVINGS. o AS OF MARCH 31, 2006, DELTA HAD $3.4 BILLION IN CASH AND CASH EQUIVALENTS, OF WHICH $2.4 BILLION WAS UNRESTRICTED. Delta reported a net loss of $2.1 billion in the first quarter of 2006, compared to a net loss of $1.1 billion in the first quarter of 2005. Excluding the reorganization and special items described below, the net loss was $356 million in the first quarter of 2006 compared to a net loss of $684 million in the first quarter of 2005. Delta expects to file its Monthly Operating Report for March 2006 with the U.S. Bankruptcy Court by May 15, 2006. In that report, the company will report a net loss of $1.6 billion for the month. Excluding reorganization and special items, the March 2006 net loss was $6 million. "While continued losses clearly are unacceptable, Delta's financial performance for the quarter was in line with expectations, especially in light of fast-rising fuel prices," said Gerald Grinstein, Delta's chief executive officer. "Despite these higher fuel costs, however, our company succeeded in reducing the first quarter operating loss by nearly fifty percent year-over-year - -- evidence that Delta's plan is on-track. I am extremely grateful to Delta people for their participation and their commitment to the hard work still ahead as we build a strong, lean, competitive airline with a long-term future." AGREEMENT WITH ALPA On April 14, 2006, Delta announced that it reached a tentative comprehensive agreement with the Air Line Pilots Association, its pilot union, on contractual changes designed to deliver $280 million in average annual pilot labor cost savings through a combination of changes to wages, benefits and work rules. The tentative agreement is subject to ratification by Delta's pilots. The results of the ratification vote are expected on May 31, 2006. In addition to pilot ratification, the agreement is subject to approval by the U.S. Bankruptcy Court. FINANCIAL PERFORMANCE Excluding special items, first quarter operating revenues increased by $202 million or 5.5 percent, compared to the first quarter of 2005, despite an 8.6 percent decrease in capacity. Excluding special items, passenger unit revenues increased 15.2 percent compared to the March 2005 quarter and a 12.4 percent improvement in yields drove the increase in passenger unit revenues. The load factor for the first quarter was 76.2 percent, a 1.9 point increase as compared to the first quarter of 2005. -more- Page 2 Excluding special items, operating expenses for the first quarter decreased 1.2 percent from the corresponding period in the prior year, despite a fuel expense increase of $266 million attributable to higher fuel prices.(3) Delta's average fuel price for the first quarter of 2006 was $1.86 per gallon, compared to $1.42 per gallon in the prior year quarter. Excluding fuel and special items, mainline unit costs decreased 1.0 percent.(4) The March 2006 quarter includes $1.7 billion in non-cash charges for reorganization and special items. Including those items, Delta's first quarter operating revenues increased by $13 million or 0.4 percent; passenger unit revenues increased 12.5 percent; yields increased 9.7 percent; operating expenses decreased 9.8 percent; and mainline unit costs decreased 5.8 percent, compared to the March 2005 quarter. "Our business plan initiatives to improve unit revenue performance, optimize our fleet, and reduce costs resulted in more than a half billion dollar impact to this quarter's financial results," said Edward H. Bastian, Delta's executive vice president and chief financial officer. "While we are encouraged by the results of our restructuring efforts, we still have a great deal of hard work ahead for Delta's turnaround to be successful." LIQUIDITY At March 31, 2006, the company had $3.4 billion in cash and cash equivalents, of which $2.4 billion was unrestricted. Capital expenditures for the quarter were $92 million. At March 31, 2006, Delta was in compliance with all of the financial covenants in its post-petition financing arrangements. During the March 2006 quarter, Delta received approval from the lenders of its $1.9 billion debtor-in-possession (DIP) credit facility to amend and restate that facility. The revised credit facility reduced Delta's interest rate on the three term loans making up the facility, resulting in annual interest savings of more than $30 million. Delta also reduced the interest rate for its post-petition financing from American Express Travel Related Services Company, Inc. Also during the March 2006 quarter, Delta completed a letter of credit facility with Merrill Lynch that allows the company to utilize up to $300 million in cash that would normally be held in reserve by Delta's Visa/MasterCard processor. -more- Page 3 REORGANIZATION AND SPECIAL ITEMS(5) In the first quarter of 2006, Delta recorded $1.7 billion in non-cash charges for reorganization items and accounting adjustments. These items are: o a $1.4 billion charge for reorganization items, primarily reflecting estimated pre-petition bankruptcy claims for the restructuring of financing arrangements for 124 mainline aircraft. o a $310 million net charge for three accounting adjustments: - A $112 million charge in landing fees and other rents, resulting from historical differences primarily associated with recording rent expense at Delta's JFK facility based on actual rent payments instead of on a straight-line basis over the lease term. - A $108 million net charge related to the sale of mileage credits under the SkyMiles(R) frequent flyer program, which is comprised of an $83 million decrease in passenger revenues, a $106 million decrease in other, net operating revenues, and an $81 million decrease in other operating expenses. - A $90 million charge in salaries and related costs to adjust an accrual for postemployment healthcare benefits. In the first quarter of 2005, Delta recorded $387 million in charges for special items, including (1) a $453 million charge related to employee initiatives under Delta's 2004 Transformation Plan, (2) a $68 million charge related to the company's defined benefit pension plan for pilots, and (3) a $10 million charge related to aircraft retirements. These charges were offset by a $144 million benefit from a reduction in Delta's required deferred income tax asset reserve. OTHER MATTERS Included with this press release are Delta's Consolidated Statements of Operations for the three months ended March 31, 2006; a statistical summary for that period; selected balance sheet data as of March 31, 2006 and December 31, 2005; and a reconciliation of certain GAAP to non-GAAP financial measures. The Consolidated Statements of Operations show Delta's net loss as reported under GAAP, as well as Delta's net loss excluding reorganization and special items. ABOUT DELTA Delta Air Lines is one of the world's fastest growing international carriers with more than 50 new international routes added or announced in the last year. Delta offers flights to 447 destinations in 96 countries on Delta, Delta Shuttle, the Delta Connection carriers and its worldwide partners. In summer 2006, Delta plans to offer customers more destinations and departures between the U.S., Europe, India and Israel than any global airline*, including service on 11 new transatlantic routes from its Atlanta and New York-JFK hubs. Delta also is a major carrier to Mexico, South and Central America and the Caribbean, with nearly 40 routes announced, added or applied to serve since Jan. 1, 2005. Delta's marketing alliances also allow customers to earn and redeem SkyMiles on more than 14,000 flights offered by SkyTeam and other partners. Delta is a founding member of SkyTeam, a global airline alliance that provides customers with extensive worldwide destinations, flights and services. Customers can check in for flights, print boarding passes and check flight status at delta.com. * From the U.S., based on July 2006 OAG. -more- Page 4 ENDNOTES - -------------------- (1) Note 1 to the attached Consolidated Statements of Operations shows a reconciliation of Delta's net loss reported under accounting principles generally accepted in the United States (GAAP) to the net loss excluding reorganization and special items, as well as reconciliations of other financial measures including and excluding reorganization and special items. Delta excludes reorganization and special items because the exclusion of these items is helpful to investors to evaluate the company's recurring operational performance. The special items for the first quarter of 2006 relate to accounting adjustments, which are described in this press release. (2) Reorganization items refers to revenues, expenses, gains or losses that are realized or incurred by us that are due to our reorganization under Chapter 11 of the U.S. Bankruptcy Code. In accordance with GAAP, these items are required to be separately classified in the Consolidated Statements of Operations. (3) Includes the impact of fuel price increases reflected in both fuel expense and contract carrier arrangements in the Consolidated Statements of Operations. (4) Delta presents mainline unit costs excluding fuel expense and special items because management believes (a) high fuel prices during the March 2006 quarter mask the progress the Company achieved toward its business plan targets and (b) the exclusion of the special items is helpful to investors to evaluate the Company's recurring operational performance. (5) Delta believes that the three accounting adjustments recorded in the first quarter of 2006, considered individually and in the aggregate, are not material to its Consolidated Financial Statements for each of the three years in the period ended December 31, 2005 and will not be material to its Consolidated Financial Statements as of and for the year ended December 31, 2006. Additional detail on reorganization and special items recorded in the first quarter of 2006 will be available in Delta's Form 10-Q for the quarter ended March 31, 2006, to be filed with the Securities and Exchange Commission. 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 actions and decisions of our creditors and other third parties with interests in our Chapter 11 proceedings; our ability to obtain court approval with respect to motions in the Chapter 11 proceedings prosecuted from time to time; our ability to develop, prosecute, confirm and consummate one or more plans of reorganization with respect to the Chapter 11 proceedings and to consummate all of the transactions contemplated by one or more such plans of reorganization or upon which consummation of such plans may be conditioned; risks associated with third parties seeking and obtaining court approval to terminate or shorten the exclusivity period for us to propose and confirm one or more plans of reorganization, to appoint a Chapter 11 trustee or to convert the cases to Chapter 7 cases; our ability to obtain and maintain normal terms with vendors and service providers; our ability to maintain contracts that are critical to our operations; our ability to maintain adequate liquidity to fund and execute our business plan during the Chapter 11 proceedings and in the context of a plan of reorganization and thereafter; our ability to comply with financial covenants in our financing agreements; labor issues, including our ability to reduce our pilot labor costs to the level called for by our business plan and possible strikes or job actions by unionized employees; our ability to implement our business plan successfully; the cost of aircraft fuel; pension plan funding obligations; 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; restructurings by competitors; the effects of terrorist attacks; 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 Delta's Securities and Exchange Commission filings, including its Form 10-K, filed on March 27, 2006. The risks and uncertainties and the terms of any reorganization plan ultimately confirmed can affect the value of our various pre-petition liabilities, common stock and/or other securities. No assurance can be given as to what values, if any, will be ascribed in the bankruptcy proceedings to each of these liabilities or securities. We believe that our currently outstanding common stock will have no value and will be canceled under any plan of reorganization we propose, and that the value of our various pre-petition liabilities and other securities is highly speculative. Accordingly, we urge that caution be exercised with respect to existing and future investments in any of these liabilities and/or securities. Investors and other interested parties can obtain information about Delta's Chapter 11 filing on the Internet at delta.com/restructure. Court filings and claims information are available at deltadocket.com. Caution should be taken not to place undue reliance on Delta's forward-looking statements, which represent Delta's views only as of May 11, 2006, and which Delta has no current intention to update. -more- Page 5 DELTA AIR LINES, INC. DEBTOR AND DEBTOR-IN POSSESSION CONSOLIDATED STATEMENTS OF OPERATIONS (UNAUDITED)
THREE MONTHS ENDED MARCH 31 --------------------------- PERCENT (IN MILLIONS) 2006 2005 CHANGE -------------------------------------- OPERATING REVENUES: Passenger: Mainline $ 2,572 $ 2,649 -2.9% Regional affiliates 858 690 24.3% Cargo 123 132 -6.8% Other, net 166 235 -29.7% -------------------------------------- Total operating revenues 3,719 3,706 0.4% OPERATING EXPENSES: Salaries and related costs 1,166 1,411 -17.4% Aircraft fuel 929 884 5.1% Depreciation and amortization 301 313 -3.8% Contracted services 261 272 -4.0% Contract carrier arrangements (a) 609 204 198.5% Landing fees and other rents 292 215 35.8% Aircraft maintenance materials and outside repairs 196 177 10.7% Aircraft rent 95 143 -33.6% Passenger commissions and other selling expenses 212 251 -15.5% Passenger service 71 84 -15.5% Restructuring, asset write downs, pension settlements, and related items, net 9 531 -98.3% Other 63 178 -64.6% -------------------------------------- Total operating expenses 4,204 4,663 -9.8% -------------------------------------- OPERATING LOSS (485) (957) -49.3% -------------------------------------- OTHER INCOME (EXPENSE): Interest expense (contractual interest expense equals $309 for three months ended March 31, 2006) (214) (268) -20.1% Interest income 12 14 -14.3% Miscellaneous expense, net -- (4) NM -------------------------------------- Total other expense, net (202) (258) -21.7% -------------------------------------- LOSS BEFORE REORGANIZATION ITEMS, NET (687) (1,215) -43.5% REORGANIZATION ITEMS, NET (1,403) -- NM -------------------------------------- LOSS BEFORE INCOME TAXES (2,090) (1,215) 72.0% INCOME TAX BENEFIT 21 144 -85.4% -------------------------------------- NET LOSS (2,069) (1,071) 93.2% PREFERRED STOCK DIVIDENDS (2) (5) -60.0% -------------------------------------- NET LOSS ATTRIBUTABLE TO COMMON SHAREOWNERS $ (2,071) $ (1,076) 92.5% ====================================== NET LOSS EXCLUDING REORGANIZATION AND SPECIAL ITEMS $ (356) $ (684) -48.0% ====================================== OPERATING MARGIN -13.0% -25.8% 12.8 pts ======================================
(a) Includes the expenses under our contract carrier agreements with Chautauqua Airlines, Inc. and Sky West Airlines, Inc. for all periods presented, and Atlantic Southeast Airlines, Inc., Freedom Airlines, Inc., and Shuttle America Corporation for the March 2006 quarter. Page 6 DELTA AIR LINES, INC. DEBTOR AND DEBTOR-IN POSSESSION STATISTICAL SUMMARY (UNAUDITED)
THREE MONTHS ENDED MARCH 31 --------------------------- PERCENT 2006 2005 CHANGE --------- --------- ---------- CONSOLIDATED: Revenue Passenger Miles (millions) (a) 26,384 28,176 -6.4% Available Seat Miles (millions) (a) 34,602 37,877 -8.6% Passenger Mile Yield (a) 13.00 cents 11.85 cents 9.7% Operating Revenue Per Available Seat Mile (a) 10.75 cents 9.79 cents 9.8% Passenger Revenue Per Available Seat Mile (a) 9.91 cents 8.81 cents 12.5% Operating Cost Per Available Seat Mile (a) 12.15 cents 12.31 cents -1.3% Operating Cost Per Available Seat Mile - excluding special items - see Note 1 (a) 11.80 cents 10.91 cents 8.2% Operating Cost Per Available Seat Mile - excluding fuel expense and special items - see Note 1 (a) 9.12 cents 8.58 cents 6.3% Passenger Load Factor (a) 76.25% 74.39% 1.9 pts Breakeven Passenger Load Factor (a) 87.03% 95.71% -8.7 pts Breakeven Passenger Load Factor - excluding special items- see Note 1 (a) 80.15% 83.88% -3.7 pts Passengers Enplaned (thousands) (a) 25,531 29,230 -12.7% Fuel Gallons Consumed (millions) 500 624 -19.9% Average Price Per Fuel Gallon, net of hedging gains $1.86 $1.42 31.0% Number of Aircraft in Fleet, End of Period 638 841 -24.1% Full-Time Equivalent Employees, End of Period 53,735 66,500 -19.2% MAINLINE: Revenue Passenger Miles (millions) 22,481 24,485 -8.2% Available Seat Miles (millions) 29,428 32,461 -9.3% Operating Cost Per Available Seat Mile 11.12 cents 11.80 cents -5.8% Operating Cost Per Available Seat Mile - excluding special items - see Note 1 10.71 cents 10.17 cents 5.3% Operating Costs Per Available Seat Mile - excluding fuel expense and special items - see Note 1 7.82 cents 7.90 cents -1.0% Number of Aircraft in Fleet, End of Period 469 535 -12.3%
(a) Includes the operations under our contract carrier agreements with Chautauqua Airlines, Inc. and SkyWest Airlines, Inc. for all periods presented; and Atlantic Southeast Airlines, Inc., Freedom Airlines, Inc., and Shuttle America Corporation for the March 2006 quarter. Page 7 DELTA AIR LINES, INC. DEBTOR AND DEBTOR-IN POSSESSION SELECTED BALANCE SHEET DATA (IN MILLIONS)
MARCH 31, DECEMBER 31, -------------- -------------- 2006 2005 -------------- -------------- (Unaudited) Cash and cash equivalents(1) $ 2,429 $ 2,008 Restricted cash, including noncurrent 991 928 Total assets 20,558 20,039 Total debt and capital leases, including current maturities 7,956 7,743 Total liabilities subject to compromise 18,695 17,380 Total shareowners' deficit (11,663) (9,895)
(1) Cash and cash equivalents as of March 31, 2006 includes $174 million which is set aside for payment of certain operational taxes and fees to various governmental authorities. Page 8 NOTE 1: THE FOLLOWING TABLES SHOW RECONCILIATION OF CERTAIN FINANCIAL MEASURES ADJUSTED FOR THE ITEMS SHOWN BELOW.
THREE MONTHS ENDED ONE MONTH ENDED MARCH 31, MARCH 31, ---------------------------------- ----------------- (in millions) 2006 2005 2006 ------------- ------------ ----------------- NET LOSS ($2,069) ($1,071) ($1,560) Items excluded: Pension and related charges -- 521 -- Aircraft charges -- 10 -- Accounting adjustments 310 -- 310 Reorganization items, net 1,403 -- 1,244 Deferred Tax reserve -- (144) -- ------------- ------------ --------- Total items excluded 1,554 1,713 387 ------------- ------------ --------- NET LOSS EXCLUDING REORGANIZATION AND SPECIAL ITEMS ($ 356) ($ 684) ($6) ============= ============ ========= (in millions) OPERATING REVENUES $3,719 $3,706 Items excluded: Accounting adjustments 189 -- ------------- ------------ Total items excluded 189 ------------- ------------ OPERATING REVENUES EXCLUDING SPECIAL ITEMS $3,908 $3,706 ============= ============ PASSENGER UNIT REVENUES 9.91 cents 8.81 cents Items excluded: Accounting adjustments 0.24 -- ------------- ------------ Total items excluded 0.24 -- ------------- ------------ PASSENGER UNIT REVENUES EXCLUDING SPECIAL ITEMS 10.15 cents 8.81 cents ============= ============ PASSENGER MILE YIELD 13.00 cents 11.85 cents Items excluded: Accounting adjustments 0.32 -- ------------- ------------ Total items excluded 0.32 -- ------------- ------------ PASSENGER MILE YIELD EXCLUDING SPECIAL ITEMS 13.32 cents 11.85 cents ============= ============ (in millions) OPERATING EXPENSES $4,204 $4,663 Items excluded: Pension and related charges -- (521) Accounting adjustments (121) -- Aircraft charges -- (10) ------------- ------------ Total items excluded (121) (531) ------------- ------------ OPERATING EXPENSES EXCLUDING SPECIAL ITEMS $4,083 $4,132 ============= ============
Page 9
THREE MONTHS ENDED MARCH 31, ------------------------------- 2006 2005 ------------ ---------- (in millions) MAINLINE OPERATING EXPENSES $3,273 $3,831 Items excluded: Pension and related charges -- (521) Accounting adjustments (121) -- Aircraft charges -- (10) ----------- ---------- Total items excluded (121) (531) ----------- ---------- MAINLINE OPERATING EXPENSES EXCLUDING SPECIAL ITEMS $3,152 $3,300 ----------- ---------- Fuel expense (851) (734) ----------- ---------- MAINLINE OPERATING EXPENSES EXCLUDING FUEL EXPENSE AND SPECIAL ITEMS $2,301 $2,566 =========== ========== UNIT COST 12.15 cents 12.31 cents Items excluded: Pension and related charges -- (1.37) Accounting adjustments (0.35) -- Aircraft charges -- (0.03) ----------- ---------- Total items excluded (0.35) (1.40) ----------- ---------- UNIT COST EXCLUDING SPECIAL ITEMS 11.80 cents 10.91 cents ----------- ---------- Fuel expense (2.68) (2.33) ----------- ---------- UNIT COST EXCLUDING FUEL EXPENSE AND SPECIAL ITEMS 9.12 cents 8.58 cents =========== ========== MAINLINE UNIT COST 11.12 cents 11.80 cents Items excluded: Pension and related charges -- (1.60) Accounting adjustments (0.41) -- Aircraft charges -- (0.03) ----------- ---------- Total items excluded (0.41) (1.63) ----------- ---------- MAINLINE UNIT COST EXCLUDING SPECIAL ITEMS 10.71 cents 10.17 cents ----------- ---------- Fuel expense (2.89) (2.27) ----------- ---------- MAINLINE UNIT COST EXCLUDING FUEL EXPENSE AND SPECIAL ITEMS 7.82 cents 7.90 cents =========== ========== BREAKEVEN PASSENGER LOAD FACTOR 87.03% 95.71% Items excluded: Pension and related charges -- (11.61) Accounting adjustments (6.88) -- Aircraft charges -- (0.22) ----------- ---------- Total items excluded (6.88) (11.83) ----------- ---------- BREAKEVEN PASSENGER LOAD FACTOR EXCLUDING SPECIAL ITEMS 80.15% 83.88% =========== ==========
THREE MONTHS ENDED CAPITAL EXPENDITURES MARCH 31, (in millions) 2006 - ------------------------------------------------------------------------- ----------------- Cash used by investing activities - GAAP Flight equipment additions $63 Ground property & equipment additions 29 ----------------- Capital expenditures $92 =================
NOTE 2: MARCH 2006 QUARTER TRAFFIC, CAPACITY, LOAD FACTOR, YIELD AND UNIT REVENUE VS. MARCH 2005 QUARTER (EXCLUDING THE IMPACT OF REORGANIZATION AND SPECIAL ITEMS)
- ---------------------------------------------------------------------------------------------------------------------- Year-Over-Year Change - ---------------------------------------------------------------------------------------------------------------------- North America Atlantic Latin America Pacific - ---------------------------------------------------------------------------------------------------------------------- Traffic (10.1)% 0.3% 24.6% 7.4% - ---------------------------------------------------------------------------------------------------------------------- Capacity (13.6)% 3.3% 27.1% 0.1% - ---------------------------------------------------------------------------------------------------------------------- Load Factor 3.0 pts (2.2) pts (1.5) pts 5.9 pts - ---------------------------------------------------------------------------------------------------------------------- Yield 15.0% 4.6% 3.8% (1.4)% - ---------------------------------------------------------------------------------------------------------------------- Passenger Unit Revenue 19.7% 1.5% 1.7% 5.8% - ----------------------------------------------------------------------------------------------------------------------
Page 10 NOTE 3: 2006 GUIDANCE
- -------------------------------------------------------------------------------- 2Q 2006 Full Year 2006 - -------------------------------------------------------------------------------- Capacity System Down 7 -- 9% Down 6 - 8% Domestic Down 15 -- 17% Down 13 -- 15% International Up 18 -- 20% Up 18 -- 20% - --------------------------------------------------------------------------------
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