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Delta Air Lines Inc. Reports Operating Results (10-Q)

October 26, 2012 | About:

10qk

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Delta Air Lines Inc. (DAL) filed Quarterly Report for the period ended 2012-09-30.

Delta Air Lines Inc has a market cap of $8.5 billion; its shares were traded at around $9.58 with a P/E ratio of 5 and P/S ratio of 0.2.

Highlight of Business Operations:

Profit Sharing. Our broad based employee profit sharing program provides that, for each year in which we have an annual pre-tax profit, as defined by the terms of the program, we will pay a specified portion of that profit to employees. In determining the amount of profit sharing, the terms of the program specify the exclusion of special items, such as MTM adjustments and restructuring and other items, from pre-tax profit. During the June 2012 quarter, our profit sharing program was modified so that we will pay 10% of profits, on the first $2.5 billion of annual profits effective with the plan year beginning January 1, 2013 compared to paying 15% of annual profits for the 2012 plan year. Under the program, we will continue to pay 20% of annual profits above $2.5 billion.

International mainline passenger revenue increased $469 million. Atlantic PRASM was up 9%, driven by a 5% increase in yield on a 7% decrease in capacity. In early 2011, we faced industry overcapacity in the transatlantic market and in connection with our joint venture partners, AirFrance-KLM and Alitalia, we have reduced capacity in underperforming markets. Pacific passenger revenue increased 12% on a 3% and 5% increase in capacity and traffic, respectively. These results reflect higher yield and traffic, as demand returned to levels seen prior to the March 2011 earthquake and tsunami in Japan.

Profit Sharing. Our broad based employee profit sharing program provides that, for each year in which we have an annual pre-tax profit, as defined by the terms of the program, we will pay a specified portion of that profit to employees. In determining the amount of profit sharing, the terms of the program specify the exclusion of special items, such as MTM adjustments and restructuring and other items, from pre-tax profit. During the June 2012 quarter, our profit sharing program was modified so that we will pay 10% of profits, on the first $2.5 billion of annual profits effective with the plan year beginning January 1, 2013 compared to paying 15% of annual profits for the 2012 plan year. Under the program, we will continue to pay 20% of annual profits above $2.5 billion.

During the nine months ended September 30, 2012, cash provided by operating activities was reduced by $678 million in pension funding and $264 million in profit sharing payments for 2011. During the nine months ended September 30, 2011, cash provided by operating activities was reduced by $313 million in profit sharing payments for 2010 and decreases in accounts payable and other accrued liabilities.

Read the The complete Report

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