þ | ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
Or | |
o | TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
Delaware | 58-0218548 |
(State or other jurisdiction of incorporation or organization) | (I.R.S. Employer Identification No.) |
Post Office Box 20706 | |
Atlanta, Georgia | 30320-6001 |
(Address of principal executive offices) | (Zip Code) |
Registrant's telephone number, including area code: (404) 715-2600 |
Title of each class | Name of each exchange on which registered | |
Common Stock, par value $0.0001 per share | New York Stock Exchange |
Large accelerated filer | þ | Accelerated filer | o | Non-accelerated filer | o | Smaller reporting company | o |
(Do not check if a smaller reporting company) |
Table of Contents | |
Page | |
PART I | |
PART II | |
Financial Highlights - 2015 Compared to 2014 | |
Results of Operations - 2015 Compared to 2014 | |
Results of Operations - 2014 Compared to 2013 | |
Page | |
PART III | |
PART IV | |
• | our international joint ventures, particularly our transatlantic joint venture with Air France-KLM and Alitalia as well as our joint venture with Virgin Atlantic; |
• | our alliances with other foreign airlines, including Aeroméxico, GOL and China Eastern and our membership in SkyTeam, a global airline alliance; and |
• | agreements with multiple domestic regional carriers, which operate as Delta Connection®. |
• | A transatlantic joint venture with Air France and KLM, both of which are subsidiaries of the same holding company, and Alitalia, which generally covers routes between North America and Europe. |
• | A transatlantic joint venture with Virgin Atlantic Airways with respect to operations on non-stop routes between the United Kingdom and North America. In addition to the joint venture, we own a non-controlling 49% equity stake in Virgin Atlantic Limited, the parent company of Virgin Atlantic Airways. |
• | A transpacific joint venture with Virgin Australia Airlines and its affiliated carriers with respect to operations on transpacific routes between North America and Australia/New Zealand. |
• | ExpressJet Airlines, Inc. and SkyWest Airlines, Inc., both subsidiaries of SkyWest, Inc.; |
• | Shuttle America Corporation ("Shuttle America"), a subsidiary of Republic Airways Holdings, Inc.; |
• | Compass Airlines, LLC (“Compass”) and GoJet Airlines, LLC, both subsidiaries of Trans States Holdings, Inc. (“Trans States”); and |
• | Endeavor Air, Inc., which is a wholly-owned subsidiary of ours. |
Year | Gallons Consumed(1) (in millions) | Cost(1)(2) (in millions) | Average Price Per Gallon(1)(2) | Percentage of Total Operating Expense(1)(2) | ||||||
2015 | 3,988 | $ | 7,579 | $ | 1.90 | 23.0 | % | |||
2014 | 3,893 | $ | 13,512 | $ | 3.47 | 35.4 | % | |||
2013 | 3,828 | $ | 11,464 | $ | 3.00 | 33.3 | % |
(1) | Includes the operations of our regional carriers operating under capacity purchase agreements. |
(2) | Includes the impact of fuel hedge activity and refinery segment results. |
• | In addition to providing maintenance and engineering support for our fleet of over 900 aircraft, our MRO operation, known as Delta TechOps, serves aviation and airline customers from around the world. |
• | Delta Global Services provides services to us and to third parties, including staffing services, aviation solutions, professional security and training services. |
• | Our vacation wholesale business, MLT Vacations, provides vacation packages to third-party consumers. |
• | Our private jet operations, Delta Private Jets, provides aircraft charters, aircraft management and programs allowing members to purchase flight time by the hour. |
Employee Group | Approximate Number of Active Employees Represented | Union | Date on which Collective Bargaining Agreement Becomes Amendable | |
Delta Pilots | 12,080 | ALPA | December 31, 2015(1) | |
Delta Flight Superintendents (Dispatchers) | 400 | PAFCA | March 31, 2018 | |
Endeavor Air Pilots | 1,360 | ALPA | January 1, 2020 | |
Endeavor Air Flight Attendants | 895 | AFA | December 31, 2018 | |
Endeavor Air Dispatchers | 50 | DISTWU | December 31, 2018 |
(1) | We are in discussions with representatives of the Delta pilots regarding terms of an amended collective bargaining agreement. |
Current Fleet(1) | Commitments | ||||||
Aircraft Type | Owned | Capital Lease | Operating Lease | Total | Average Age | Purchase(2) | Lease |
B-717-200 | — | 13 | 74 | 87 | 14.3 | — | 1 |
B-737-700 | 10 | — | — | 10 | 6.9 | — | — |
B-737-800 | 73 | — | — | 73 | 14.9 | — | — |
B-737-900ER | 31 | — | 19 | 50 | 1.3 | 70 | — |
B-747-400 | 4 | 5 | — | 9 | 23.7 | — | — |
B-757-200 | 81 | 18 | 11 | 110 | 20.0 | — | — |
B-757-300 | 16 | — | — | 16 | 12.8 | — | — |
B-767-300 | 13 | — | 1 | 14 | 24.7 | — | — |
B-767-300ER | 54 | 4 | — | 58 | 19.8 | — | — |
B-767-400ER | 21 | — | — | 21 | 14.8 | — | — |
B-777-200ER | 8 | — | — | 8 | 15.9 | — | — |
B-777-200LR | 10 | — | — | 10 | 6.7 | — | — |
B-787-8 | — | — | — | — | — | 18 | — |
A319-100 | 55 | — | 2 | 57 | 13.9 | — | — |
A320-200 | 58 | — | 11 | 69 | 20.8 | — | — |
A321-200 | — | — | — | — | — | 45 | — |
A330-200 | 11 | — | — | 11 | 10.8 | — | — |
A330-300 | 25 | — | — | 25 | 8.8 | 6 | — |
A330-900neo | — | — | — | — | — | 25 | — |
A350-900 | — | — | — | — | — | 25 | — |
E190-100 | — | — | — | — | — | 19 | — |
MD-88 | 83 | 33 | — | 116 | 25.4 | — | — |
MD-90 | 59 | 6 | — | 65 | 18.9 | — | — |
Total | 612 | 79 | 118 | 809 | 17.1 | 208 | 1 |
(1) | Excludes certain aircraft we own or lease, which are operated by regional carriers on our behalf shown in the table below. |
(2) | Our purchase commitment for the 18 B-787-8 aircraft provides for certain aircraft substitution rights, including for our current orders of B-737-900ER aircraft. |
Fleet Type | |||||||
Carrier | CRJ-200 | CRJ-700 | CRJ-900 | Embraer 145 | Embraer 170 | Embraer 175 | Total |
Endeavor Air, Inc.(1) | 36 | — | 81 | — | — | — | 117 |
ExpressJet Airlines, Inc. | 41 | 41 | 28 | — | — | — | 110 |
SkyWest Airlines, Inc. | 58 | 19 | 36 | — | — | — | 113 |
Compass Airlines, LLC | — | — | — | — | 6 | 36 | 42 |
Shuttle America | — | — | — | 41 | 14 | 16 | 71 |
GoJet Airlines, LLC | — | 22 | 7 | — | — | — | 29 |
Total | 135 | 82 | 152 | 41 | 20 | 52 | 482 |
(1) | Endeavor Air, Inc. is a wholly-owned subsidiary of Delta. |
Delivery in Calendar Years Ending | |||||
Aircraft Purchase Commitments | 2016 | 2017 | 2018 | After 2018 | Total |
B-737-900ER | 19 | 20 | 18 | 13 | 70 |
B-787-8 | — | — | — | 18 | 18 |
A321-200 | 15 | 15 | 15 | — | 45 |
A330-300 | 4 | 2 | — | — | 6 |
A330-900neo | — | — | — | 25 | 25 |
A350-900 | — | 6 | 9 | 10 | 25 |
E190-100 | 19 | — | — | — | 19 |
Total | 57 | 43 | 42 | 66 | 208 |
Common Stock | Cash Dividends Declared (per share) | |||||||||||
High | Low | |||||||||||
Fiscal 2015 | ||||||||||||
Fourth Quarter | $ | 52.77 | $ | 43.35 | $ | 0.135 | ||||||
Third Quarter | $ | 48.30 | $ | 34.61 | $ | 0.135 | ||||||
Second Quarter | $ | 47.98 | $ | 38.97 | $ | 0.09 | ||||||
First Quarter | $ | 51.06 | $ | 42.60 | $ | 0.09 | ||||||
Fiscal 2014 | ||||||||||||
Fourth Quarter | $ | 50.16 | $ | 30.12 | $ | 0.09 | ||||||
Third Quarter | $ | 40.97 | $ | 34.59 | $ | 0.09 | ||||||
Second Quarter | $ | 42.66 | $ | 30.54 | $ | 0.06 | ||||||
First Quarter | $ | 35.85 | $ | 27.26 | $ | 0.06 |
Period | Total Number of Shares Purchased | Average Price Paid Per Share | Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs | Approximate Dollar Value (in millions) of Shares That May Yet Be Purchased Under the Plan or Programs | |||||||
October 2015 | 3,394,359 | $ | 48.35 | 3,394,359 | $ | 4,211 | |||||
November 2015 | 4,668,397 | $ | 49.63 | 4,668,397 | $ | 3,979 | |||||
December 2015 | 641,682 | $ | 46.96 | 641,682 | $ | 3,950 | |||||
Total | 8,704,438 | 8,704,438 |
Year Ended December 31, | |||||||||||||||
(in millions, except share data) | 2015 | 2014 | 2013 | 2012 | 2011 | ||||||||||
Operating revenue | $ | 40,704 | $ | 40,362 | $ | 37,773 | $ | 36,670 | $ | 35,115 | |||||
Operating expense | 32,902 | 38,156 | 34,373 | 34,495 | 33,140 | ||||||||||
Operating income | 7,802 | 2,206 | 3,400 | 2,175 | 1,975 | ||||||||||
Non-operating expense, net | (645 | ) | (1,134 | ) | (873 | ) | (1,150 | ) | (1,206 | ) | |||||
Income before income taxes | 7,157 | 1,072 | 2,527 | 1,025 | 769 | ||||||||||
Income tax (provision) benefit | (2,631 | ) | (413 | ) | 8,013 | (16 | ) | 85 | |||||||
Net income | $ | 4,526 | $ | 659 | $ | 10,540 | $ | 1,009 | $ | 854 | |||||
Basic earnings per share | $ | 5.68 | $ | 0.79 | $ | 12.41 | $ | 1.20 | $ | 1.02 | |||||
Diluted earnings per share | $ | 5.63 | $ | 0.78 | $ | 12.29 | $ | 1.19 | $ | 1.01 | |||||
Cash dividends declared per share | $ | 0.45 | $ | 0.30 | $ | 0.12 | $ | — | $ | — |
Year Ended December 31, | |||||||||||||||
(in millions) | 2015 | 2014 | 2013 | 2012 | 2011 | ||||||||||
MTM adjustments and settlements | $ | 1,301 | $ | (2,346 | ) | $ | 276 | $ | 27 | $ | (26 | ) | |||
Restructuring and other | (35 | ) | (716 | ) | (424 | ) | (452 | ) | (242 | ) | |||||
Loss on extinguishment of debt | — | (268 | ) | — | (118 | ) | (68 | ) | |||||||
Virgin Atlantic MTM adjustments | 26 | (134 | ) | — | — | — | |||||||||
Release of tax valuation allowance and intraperiod income tax allocation | — | — | 7,989 | — | — | ||||||||||
Total income (loss) | $ | 1,292 | $ | (3,464 | ) | $ | 7,841 | $ | (543 | ) | $ | (336 | ) |
December 31, | |||||||||||||||
(in millions) | 2015 | 2014 | 2013 | 2012 | 2011 | ||||||||||
Total assets | $ | 53,134 | $ | 54,005 | $ | 52,104 | $ | 43,933 | $ | 42,879 | |||||
Long-term debt and capital leases (including current maturities) | $ | 8,329 | $ | 9,661 | $ | 11,194 | $ | 12,555 | $ | 13,632 | |||||
Stockholders' equity (deficit) | $ | 10,850 | $ | 8,813 | $ | 11,643 | $ | (2,131 | ) | $ | (1,396 | ) |
Year Ended December 31, | |||||||||||||||
Consolidated(1) | 2015 | 2014 | 2013 | 2012 | 2011 | ||||||||||
Revenue passenger miles (in millions) | 209,625 | 202,925 | 194,988 | 192,974 | 192,767 | ||||||||||
Available seat miles (in millions) | 246,764 | 239,676 | 232,740 | 230,415 | 234,656 | ||||||||||
Passenger mile yield | 16.59 | ¢ | 17.22 | ¢ | 16.89 | ¢ | 16.46 | ¢ | 15.70 | ¢ | |||||
Passenger revenue per available seat mile | 14.10 | ¢ | 14.58 | ¢ | 14.15 | ¢ | 13.78 | ¢ | 12.89 | ¢ | |||||
Operating cost per available seat mile | 13.33 | ¢ | 15.92 | ¢ | 14.77 | ¢ | 14.97 | ¢ | 14.12 | ¢ | |||||
Passenger load factor | 84.9 | % | 84.7 | % | 83.8 | % | 83.8 | % | 82.1 | % | |||||
Fuel gallons consumed (in millions) | 3,988 | 3,893 | 3,828 | 3,769 | 3,856 | ||||||||||
Average price per fuel gallon(2) | $ | 1.90 | $ | 3.47 | $ | 3.00 | $ | 3.25 | $ | 3.06 | |||||
Full-time equivalent employees, end of period | 82,949 | 79,655 | 77,755 | 73,561 | 78,392 |
(1) | Includes the operations of our regional carriers under capacity purchase agreements. Full-time equivalent employees exclude employees of regional carriers that we do not own. |
(2) | Includes the impact of fuel hedge activity and refinery segment results. |
Year Ended December 31, | Increase (Decrease) | % Increase (Decrease) | |||||||||
(in millions) | 2015 | 2014 | |||||||||
Passenger: | |||||||||||
Mainline | $ | 28,898 | $ | 28,688 | $ | 210 | 0.7 | % | |||
Regional carriers | 5,884 | 6,266 | (382 | ) | (6.1 | )% | |||||
Total passenger revenue | 34,782 | 34,954 | (172 | ) | (0.5 | )% | |||||
Cargo | 813 | 934 | (121 | ) | (13.0 | )% | |||||
Other | 5,109 | 4,474 | 635 | 14.2 | % | ||||||
Total operating revenue | $ | 40,704 | $ | 40,362 | $ | 342 | 0.8 | % |
Increase (Decrease) vs. Year Ended December 31, 2014 | ||||||||||||||||
(in millions) | Year Ended December 31, 2015 | Passenger Revenue | RPMs (Traffic) | ASMs (Capacity) | Passenger Mile Yield | PRASM | Load Factor | |||||||||
Mainline | $ | 17,933 | 5.4 | % | 6.7 | % | 6.1 | % | (1.2 | )% | (0.6 | )% | 0.5 | pts | ||
Regional carriers | 5,884 | (6.1 | )% | (2.2 | )% | (4.0 | )% | (4.0 | )% | (2.1 | )% | 1.5 | pts | |||
Domestic | 23,817 | 2.3 | % | 5.1 | % | 4.1 | % | (2.6 | )% | (1.8 | )% | 0.8 | pts | |||
Atlantic | 5,548 | (4.8 | )% | 0.6 | % | 3.2 | % | (5.3 | )% | (7.7 | )% | (2.1 | ) | pts | ||
Pacific | 3,002 | (12.2 | )% | (2.3 | )% | (5.0 | )% | (10.2 | )% | (7.6 | )% | 2.3 | pts | |||
Latin America | 2,415 | (0.4 | )% | 5.1 | % | 5.7 | % | (5.3 | )% | (5.8 | )% | (0.5 | ) | pts | ||
Total | $ | 34,782 | (0.5 | )% | 3.3 | % | 3.0 | % | (3.7 | )% | (3.3 | )% | 0.2 | pts |
Year Ended December 31, | Increase (Decrease) | % Increase (Decrease) | |||||||||
(in millions) | 2015 | 2014 | |||||||||
Salaries and related costs | $ | 8,776 | $ | 8,120 | $ | 656 | 8.1 | % | |||
Aircraft fuel and related taxes | 6,544 | 11,668 | (5,124 | ) | (43.9 | )% | |||||
Regional carriers expense | 4,241 | 5,237 | (996 | ) | (19.0 | )% | |||||
Aircraft maintenance materials and outside repairs | 1,848 | 1,828 | 20 | 1.1 | % | ||||||
Contracted services | 1,848 | 1,749 | 99 | 5.7 | % | ||||||
Depreciation and amortization | 1,835 | 1,771 | 64 | 3.6 | % | ||||||
Passenger commissions and other selling expenses | 1,672 | 1,700 | (28 | ) | (1.6 | )% | |||||
Landing fees and other rents | 1,493 | 1,442 | 51 | 3.5 | % | ||||||
Profit sharing | 1,490 | 1,085 | 405 | 37.3 | % | ||||||
Passenger service | 872 | 810 | 62 | 7.7 | % | ||||||
Aircraft rent | 250 | 233 | 17 | 7.3 | % | ||||||
Restructuring and other | 35 | 716 | (681 | ) | NM(1) | ||||||
Other | 1,998 | 1,797 | 201 | 11.2 | % | ||||||
Total operating expense | $ | 32,902 | $ | 38,156 | $ | (5,254 | ) | (13.8 | )% |
(1) | Due to the nature of amounts recorded within restructuring and other, a year-over-year comparison is not meaningful. For a discussion of charges recorded in restructuring and other, see Note 15 of the Notes to the Consolidated Financial Statements. |
Year Ended December 31, | Increase (Decrease) | % Increase (Decrease) | |||||||||
(in millions, except per gallon data) | 2015 | 2014 | |||||||||
Aircraft fuel and related taxes(1) | $ | 6,544 | $ | 11,668 | $ | (5,124 | ) | ||||
Aircraft fuel and related taxes included within regional carriers expense | 1,035 | 1,844 | (809 | ) | |||||||
Total fuel expense | $ | 7,579 | $ | 13,512 | $ | (5,933 | ) | (43.9 | )% |
(1) | Includes the impact of fuel hedging and refinery results described further in the table below. |
Average Price Per Gallon | |||||||||||||||||||
Year Ended December 31, | Increase (Decrease) | Year Ended December 31, | Increase (Decrease) | ||||||||||||||||
(in millions, except per gallon data) | 2015 | 2014 | 2015 | 2014 | |||||||||||||||
Fuel purchase cost(1) | $ | 6,934 | $ | 11,350 | $ | (4,416 | ) | $ | 1.74 | $ | 2.91 | $ | (1.17 | ) | |||||
Airline segment fuel hedge losses(2) | 935 | 2,258 | (1,323 | ) | 0.23 | 0.58 | (0.35 | ) | |||||||||||
Refinery segment impact(2) | (290 | ) | (96 | ) | (194 | ) | (0.07 | ) | (0.02 | ) | (0.05 | ) | |||||||
Total fuel expense | $ | 7,579 | $ | 13,512 | $ | (5,933 | ) | $ | 1.90 | $ | 3.47 | $ | (1.57 | ) | |||||
MTM adjustments and settlements(3) | 1,301 | (2,346 | ) | 3,647 | 0.33 | (0.60 | ) | 0.93 | |||||||||||
Total fuel expense, adjusted | $ | 8,880 | $ | 11,166 | $ | (2,286 | ) | $ | 2.23 | $ | 2.87 | $ | (0.64 | ) |
(1) | Market price for jet fuel at airport locations, including related taxes and transportation costs. |
(2) | Includes the impact of pricing arrangements between the airline and refinery segments with respect to the refinery's inventory price risk. For additional information regarding the refinery segment impact, see "Refinery Segment" below. |
(3) | MTM adjustments and settlements include the effects of the derivative transactions discussed in Note 4 of the Notes to the Consolidated Financial Statements. For additional information and the reason for adjusting fuel expense, see "Supplemental Information" below. |
Year Ended December 31, | Increase | % Increase | |||||||||
(in millions) | 2014 | 2013 | |||||||||
Passenger: | |||||||||||
Mainline | $ | 28,688 | $ | 26,534 | $ | 2,154 | 8.1 | % | |||
Regional carriers | 6,266 | 6,408 | (142 | ) | (2.2 | )% | |||||
Total passenger revenue | 34,954 | 32,942 | 2,012 | 6.1 | % | ||||||
Cargo | 934 | 937 | (3 | ) | (0.3 | )% | |||||
Other | 4,474 | 3,894 | 580 | 14.9 | % | ||||||
Total operating revenue | $ | 40,362 | $ | 37,773 | $ | 2,589 | 6.9 | % |
Increase (Decrease) vs. Year Ended December 31, 2013 | ||||||||||||||||
(in millions) | Year Ended December 31, 2014 | Passenger Revenue | RPMs (Traffic) | ASMs (Capacity) | Passenger Mile Yield | PRASM | Load Factor | |||||||||
Mainline | $ | 17,017 | 11.9 | % | 6.5 | % | 4.1 | % | 5.1 | % | 7.5 | % | 2.0 | pts | ||
Regional carriers | 6,266 | (2.2 | )% | (1.5 | )% | (3.8 | )% | (0.7 | )% | 1.7 | % | 1.9 | pts | |||
Domestic | 23,283 | 7.7 | % | 5.0 | % | 2.4 | % | 2.6 | % | 5.2 | % | 2.4 | pts | |||
Atlantic | 5,826 | 3.0 | % | (0.1 | )% | 0.9 | % | 3.0 | % | 2.1 | % | (0.8 | ) | pts | ||
Pacific | 3,421 | (4.0 | )% | (1.2 | )% | (0.2 | )% | (2.8 | )% | (3.8 | )% | (0.9 | ) | pts | ||
Latin America | 2,424 | 14.8 | % | 16.7 | % | 17.7 | % | (1.6 | )% | (2.5 | )% | (0.7 | ) | pts | ||
Total consolidated | $ | 34,954 | 6.1 | % | 4.1 | % | 3.0 | % | 2.0 | % | 3.0 | % | 0.9 | pts |
Year Ended December 31, | Increase (Decrease) | % Increase (Decrease) | |||||||||
(in millions) | 2014 | 2013 | |||||||||
Salaries and related costs | $ | 8,120 | $ | 7,720 | $ | 400 | 5.2 | % | |||
Aircraft fuel and related taxes | 11,668 | 9,397 | 2,271 | 24.2 | % | ||||||
Regional carriers expense | 5,237 | 5,669 | (432 | ) | (7.6 | )% | |||||
Aircraft maintenance materials and outside repairs | 1,828 | 1,852 | (24 | ) | (1.3 | )% | |||||
Contracted services | 1,749 | 1,665 | 84 | 5.0 | % | ||||||
Depreciation and amortization | 1,771 | 1,658 | 113 | 6.8 | % | ||||||
Passenger commissions and other selling expenses | 1,700 | 1,603 | 97 | 6.1 | % | ||||||
Landing fees and other rents | 1,442 | 1,410 | 32 | 2.3 | % | ||||||
Profit sharing | 1,085 | 506 | 579 | NM | |||||||
Passenger service | 810 | 762 | 48 | 6.3 | % | ||||||
Aircraft rent | 233 | 209 | 24 | 11.5 | % | ||||||
Restructuring and other | 716 | 402 | 314 | NM(1) | |||||||
Other | 1,797 | 1,520 | 277 | 18.2 | % | ||||||
Total operating expense | $ | 38,156 | $ | 34,373 | $ | 3,783 | 11.0 | % |
(1) | Due to the nature of amounts recorded within restructuring and other, a year-over-year comparison is not meaningful. For a discussion of charges recorded in restructuring and other, see Note 15 of the Notes to the Consolidated Financial Statements. |
Year Ended December 31, | Increase (Decrease) | % Increase (Decrease) | |||||||||
(in millions, except per gallon data) | 2014 | 2013 | |||||||||
Aircraft fuel and related taxes(1) | $ | 11,668 | $ | 9,397 | $ | 2,271 | |||||
Aircraft fuel and related taxes included within regional carriers expense | 1,844 | 2,067 | (223 | ) | |||||||
Total fuel expense | $ | 13,512 | $ | 11,464 | $ | 2,048 | 17.9 | % |
(1) | Includes the impact of fuel hedging and refinery results described further in the table below. |
Average Price Per Gallon | |||||||||||||||||||
Year Ended December 31, | Increase (Decrease) | Year Ended December 31, | Increase (Decrease) | ||||||||||||||||
(in millions, except per gallon data) | 2014 | 2013 | 2014 | 2013 | |||||||||||||||
Fuel purchase cost(1) | $ | 11,350 | $ | 11,792 | $ | (442 | ) | $ | 2.91 | $ | 3.09 | $ | (0.18 | ) | |||||
Airline segment fuel hedge losses (gains)(2) | 2,258 | (444 | ) | 2,702 | 0.58 | (0.12 | ) | 0.70 | |||||||||||
Refinery segment impact(2) | (96 | ) | 116 | (212 | ) | (0.02 | ) | 0.03 | (0.05 | ) | |||||||||
Total fuel expense | $ | 13,512 | $ | 11,464 | $ | 2,048 | $ | 3.47 | $ | 3.00 | $ | 0.47 | |||||||
MTM adjustments(3) | (2,346 | ) | 276 | (2,622 | ) | (0.60 | ) | 0.07 | (0.67 | ) | |||||||||
Total fuel expense, adjusted | $ | 11,166 | $ | 11,740 | $ | (574 | ) | $ | 2.87 | $ | 3.07 | $ | (0.20 | ) |
(1) | Market price for jet fuel at airport locations, including related taxes and transportation costs. |
(2) | Includes the impact of pricing arrangements between the airline and refinery segments with respect to the refinery's inventory price risk. For additional information regarding the refinery segment impact, see "Refinery Segment" below. |
(3) | MTM adjustments include the effects of the derivative transactions discussed in Note 4 of the Notes to the Consolidated Financial Statements. For additional information and the reason for adjusting fuel expense, see "Supplemental Information" below. |
Year Ended December 31, | Favorable (Unfavorable) | |||||||||||||||
(in millions) | 2015 | 2014 | 2013 | 2015 vs. 2014 | 2014 vs. 2013 | |||||||||||
Interest expense, net | $ | (481 | ) | $ | (650 | ) | $ | (852 | ) | $ | 169 | $ | 202 | |||
Miscellaneous, net | (164 | ) | (484 | ) | (21 | ) | 320 | (463 | ) | |||||||
Total non-operating expense, net | $ | (645 | ) | $ | (1,134 | ) | $ | (873 | ) | $ | 489 | $ | (261 | ) |
Rating Agency | Current Rating | Outlook |
Standard & Poor's | BB+ | Stable |
Moody's | Ba2 | Positive |
Fitch | BB+ | Positive |
(in millions, except dividends per share) | Dividends per Share | Share Repurchase Authorization | Average Repurchase Price | Completion Date | Authorization Remaining | |||||||||
May 2013 Program | $ | 0.060 | $ | 500 | $ | 28.43 | June 30, 2016 | Completed June 2014 | ||||||
May 2014 Program | $ | 0.090 | $ | 2,000 | $ | 42.86 | December 31, 2016 | Completed June 2015 | ||||||
May 2015 Program | $ | 0.135 | $ | 5,000 | $ | 45.77 | December 31, 2017 | $ | 3,950 |
Contractual Obligations by Year(1) | |||||||||||||||||||||
(in millions) | 2016 | 2017 | 2018 | 2019 | 2020 | Thereafter | Total | ||||||||||||||
Long-term debt (see Note 6) | |||||||||||||||||||||
Principal amount | $ | 1,442 | $ | 869 | $ | 2,061 | $ | 1,189 | $ | 456 | $ | 2,081 | $ | 8,098 | |||||||
Interest payments | 339 | 294 | 253 | 166 | 110 | 294 | 1,456 | ||||||||||||||
Capital lease obligations (see Note 7) | |||||||||||||||||||||
Principal amount | 148 | 94 | 44 | 35 | 26 | 36 | 383 | ||||||||||||||
Interest payments | 35 | 20 | 12 | 6 | 3 | 3 | 79 | ||||||||||||||
Operating lease payments (see Note 7) | 1,583 | 1,440 | 1,307 | 1,158 | 1,053 | 6,220 | 12,761 | ||||||||||||||
Aircraft purchase commitments (see Note 10) | 2,140 | 2,500 | 2,510 | 1,500 | 1,900 | 3,010 | 13,560 | ||||||||||||||
Contract carrier obligations (see Note 10) | 2,160 | 2,270 | 2,110 | 1,960 | 1,650 | 2,170 | 12,320 | ||||||||||||||
Employee benefit obligations (see Note 9) | 692 | 632 | 674 | 899 | 755 | 8,301 | 11,953 | ||||||||||||||
Other obligations | 680 | 330 | 280 | 160 | 70 | 500 | 2,020 | ||||||||||||||
Total | $ | 9,219 | $ | 8,449 | $ | 9,251 | $ | 7,073 | $ | 6,023 | $ | 22,615 | $ | 62,630 |
(1) | For additional information, see the Notes to the Consolidated Financial Statements referenced in the table above. |
Change in Assumption | Effect on 2016 Pension Expense | Effect on Accrued Pension Liability at December 31, 2015 |
0.50% decrease in weighted average discount rate | -$1 million | +$1.3 billion |
0.50% increase in weighted average discount rate | -$2 million | -$1.2 billion |
0.50% decrease in expected long-term rate of return on assets | +$50 million | — |
0.50% increase in expected long-term rate of return on assets | -$50 million | — |
• | MTM adjustments and settlements. MTM adjustments are defined as fair value changes recorded in periods other than the settlement period. Such fair value changes are not necessarily indicative of the actual settlement value of the underlying hedge in the contract settlement period. Settlements represent cash received or paid on hedge contracts settled during the period. These items adjust fuel expense to show the economic impact of hedging, including cash received or paid on hedge contracts during the period. Adjusting for these items allows investors to better understand and analyze our core operational performance in the periods shown. |
• | Restructuring and other. Because of the variability in restructuring and other, the adjustment for this item is helpful to investors to analyze our recurring core performance in the periods shown. |
• | Loss on extinguishment of debt. We adjusted for loss on extinguishment of debt in 2014 to assist investors with their analysis of our recurring core financial performance. |
• | Virgin Atlantic MTM adjustments. We record our proportionate share of earnings from our equity investment in Virgin Atlantic in other expense. We adjust for Virgin Atlantic's MTM adjustments to allow investors to better understand and analyze our core financial performance in the periods shown. |
Year Ended December 31, | ||||||
(in millions) | 2015 | 2014 | ||||
Pre-tax income | $ | 7,157 | $ | 1,072 | ||
Adjusted for: | ||||||
MTM adjustments and settlements | (1,301 | ) | 2,346 | |||
Restructuring and other | 35 | 716 | ||||
Loss on extinguishment of debt | — | 268 | ||||
Virgin Atlantic MTM adjustments | (26 | ) | 134 | |||
Pre-tax income, adjusted for special items | $ | 5,865 | $ | 4,536 |
• | Aircraft fuel and related taxes. The volatility in fuel prices impacts the comparability of year-over-year financial performance. The adjustment for aircraft fuel and related taxes (including our regional carriers) allows investors to better understand and analyze our non-fuel costs and year-over-year financial performance. |
• | Profit sharing. We adjust for profit sharing because this adjustment allows investors to better understand and analyze our recurring cost performance and provides a more meaningful comparison of our core operating costs to the airline industry. |
• | Restructuring and other. Because of the variability in restructuring and other, the adjustment for this item is helpful to investors to analyze our recurring core performance in the periods shown. |
• | Other expenses. Other expenses include aircraft maintenance and staffing services we provide to third parties, our vacation wholesale operations and refinery cost of sales to third parties. Because these businesses are not related to the generation of a seat mile, we adjust for the costs related to these sales to provide a more meaningful comparison of the costs of our airline operations to the rest of the airline industry. |
Year Ended December 31, | ||||||
2015 | 2014 | |||||
CASM | 13.33 | ¢ | 15.92 | ¢ | ||
Adjusted for: | ||||||
Aircraft fuel and related taxes | (3.07 | ) | (5.64 | ) | ||
Profit sharing | (0.60 | ) | (0.45 | ) | ||
Restructuring and other | (0.01 | ) | (0.30 | ) | ||
Other expenses | (0.48 | ) | (0.37 | ) | ||
CASM-Ex | 9.17 | ¢ | 9.16 | ¢ |
Year Ended December 31, | ||||||||
(in millions, except % of return) | 2015 | 2014 | ||||||
Operating income | $ | 7,802 | $ | 2,206 | ||||
Adjusted for: | ||||||||
MTM adjustments and settlements | (1,301 | ) | 2,346 | |||||
Restructuring and other | 35 | 716 | ||||||
7x annual interest expense included in aircraft rent | 172 | 149 | ||||||
Amortization of retirement actuarial loss | 230 | 112 | ||||||
Operating income, adjusted | $ | 6,938 | $ | 5,529 | ||||
Adjusted book value of equity | $ | 17,564 | $ | 18,518 | ||||
Average adjusted net debt | 6,970 | 8,215 | ||||||
Adjusted average invested capital(1) | $ | 24,534 | $ | 26,733 | ||||
ROIC | 28.3 | % | 20.7 | % |
(1) | Adjusted average invested capital represents the sum of the average book value of equity at the end of the last five quarters, adjusted for pension and fuel hedge impacts within other comprehensive income. Average adjusted net debt is calculated using amounts as of the end of the last five quarters. |
(in millions) | December 31, 2015 | December 31, 2009 | |||||||
Debt and capital lease obligations | $ | 8,329 | $ | 17,198 | |||||
Plus: unamortized discount, net and debt issuance costs | 152 | 1,123 | |||||||
Adjusted debt and capital lease obligations | $ | 8,481 | $ | 18,321 | |||||
Plus: 7x last twelve months' aircraft rent | 1,750 | 3,360 | |||||||
Adjusted total debt | 10,231 | 21,681 | |||||||
Less: cash, cash equivalents and short-term investments | (3,437 | ) | (4,678 | ) | |||||
Less: hedge margin (receivable) payable | (119 | ) | 10 | ||||||
Adjusted net debt | $ | 6,675 | $ | 17,013 |
(in millions, except for percentages) | (Increase) Decrease(1) | ||
+ 40% | $ | (1,630 | ) |
+ 20% | (820 | ) | |
- 20% | 820 | ||
- 40% | 1,630 |
(1) | Projections based upon the (increase) decrease to unhedged fuel cost as compared to the jet fuel price per gallon of $1.01, excluding transportation costs and taxes, at January 31, 2016 and estimated fuel consumption of 3.7 billion gallons for the period from February 1, 2016 to December 31, 2016. |
Page | |
Atlanta, Georgia | /s/ Ernst & Young LLP |
February 5, 2016 |
December 31, | ||||||||
(in millions, except share data) | 2015 | 2014 | ||||||
ASSETS | ||||||||
Current Assets: | ||||||||
Cash and cash equivalents | $ | 1,972 | $ | 2,088 | ||||
Short-term investments | 1,465 | 1,217 | ||||||
Accounts receivable, net of an allowance for uncollectible accounts of $9 and $11 at December 31, 2015 and 2014, respectively | 2,020 | 2,297 | ||||||
Hedge margin receivable | 119 | 925 | ||||||
Fuel inventory | 379 | 534 | ||||||
Expendable parts and supplies inventories, net of an allowance for obsolescence of $114 and $127 at December 31, 2015 and 2014, respectively | 318 | 318 | ||||||
Hedge derivatives asset | 1,987 | 1,078 | ||||||
Prepaid expenses and other | 796 | 701 | ||||||
Total current assets | 9,056 | 9,158 | ||||||
Property and Equipment, Net: | ||||||||
Property and equipment, net of accumulated depreciation and amortization of $10,871 and $9,340 at December 31, 2015 and 2014, respectively | 23,039 | 21,929 | ||||||
Other Assets: | ||||||||
Goodwill | 9,794 | 9,794 | ||||||
Identifiable intangibles, net of accumulated amortization of $811 and $793 at December 31, 2015 and 2014, respectively | 4,861 | 4,603 | ||||||
Deferred income taxes, net | 4,956 | 7,595 | ||||||
Other noncurrent assets | 1,428 | 926 | ||||||
Total other assets | 21,039 | 22,918 | ||||||
Total assets | $ | 53,134 | $ | 54,005 | ||||
LIABILITIES AND STOCKHOLDERS' EQUITY | ||||||||
Current Liabilities: | ||||||||
Current maturities of long-term debt and capital leases | $ | 1,563 | $ | 1,184 | ||||
Air traffic liability | 4,503 | 4,296 | ||||||
Accounts payable | 2,743 | 2,622 | ||||||
Accrued salaries and related benefits | 3,195 | 2,266 | ||||||
Hedge derivatives liability | 2,581 | 2,772 | ||||||
Frequent flyer deferred revenue | 1,635 | 1,580 | ||||||
Other accrued liabilities | 1,306 | 2,127 | ||||||
Total current liabilities | 17,526 | 16,847 | ||||||
Noncurrent Liabilities: | ||||||||
Long-term debt and capital leases | 6,766 | 8,477 | ||||||
Pension, postretirement and related benefits | 13,855 | 15,138 | ||||||
Frequent flyer deferred revenue | 2,246 | 2,602 | ||||||
Other noncurrent liabilities | 1,891 | 2,128 | ||||||
Total noncurrent liabilities | 24,758 | 28,345 | ||||||
Commitments and Contingencies | ||||||||
Stockholders' Equity: | ||||||||
Common stock at $0.0001 par value; 1,500,000,000 shares authorized, 799,850,675 and 845,048,310 shares issued at December 31, 2015 and 2014, respectively | — | — | ||||||
Additional paid-in capital | 10,875 | 12,981 | ||||||
Retained earnings | 7,623 | 3,456 | ||||||
Accumulated other comprehensive loss | (7,275 | ) | (7,311 | ) | ||||
Treasury stock, at cost, 21,066,684 and 19,790,077 shares at December 31, 2015 and 2014, respectively | (373 | ) | (313 | ) | ||||
Total stockholders' equity | 10,850 | 8,813 | ||||||
Total liabilities and stockholders' equity | $ | 53,134 | $ | 54,005 | ||||
The accompanying notes are an integral part of these Consolidated Financial Statements. |
Year Ended December 31, | |||||||||||
(in millions, except per share data) | 2015 | 2014 | 2013 | ||||||||
Operating Revenue: | |||||||||||
Passenger: | |||||||||||
Mainline | $ | 28,898 | $ | 28,688 | $ | 26,534 | |||||
Regional carriers | 5,884 | 6,266 | 6,408 | ||||||||
Total passenger revenue | 34,782 | 34,954 | 32,942 | ||||||||
Cargo | 813 | 934 | 937 | ||||||||
Other | 5,109 | 4,474 | 3,894 | ||||||||
Total operating revenue | 40,704 | 40,362 | 37,773 | ||||||||
Operating Expense: | |||||||||||
Salaries and related costs | 8,776 | 8,120 | 7,720 | ||||||||
Aircraft fuel and related taxes | 6,544 | 11,668 | 9,397 | ||||||||
Regional carriers expense | 4,241 | 5,237 | 5,669 | ||||||||
Aircraft maintenance materials and outside repairs | 1,848 | 1,828 | 1,852 | ||||||||
Contracted services | 1,848 | 1,749 | 1,665 | ||||||||
Depreciation and amortization | 1,835 | 1,771 | 1,658 | ||||||||
Passenger commissions and other selling expenses | 1,672 | 1,700 | 1,603 | ||||||||
Landing fees and other rents | 1,493 | 1,442 | 1,410 | ||||||||
Profit sharing | 1,490 | 1,085 | 506 | ||||||||
Passenger service | 872 | 810 | 762 | ||||||||
Aircraft rent | 250 | 233 | 209 | ||||||||
Restructuring and other | 35 | 716 | 402 | ||||||||
Other | 1,998 | 1,797 | 1,520 | ||||||||
Total operating expense | 32,902 | 38,156 | 34,373 | ||||||||
Operating Income | 7,802 | 2,206 | 3,400 | ||||||||
Non-Operating Expense: | |||||||||||
Interest expense, net | (481 | ) | (650 | ) | (852 | ) | |||||
Miscellaneous, net | (164 | ) | (484 | ) | (21 | ) | |||||
Total non-operating expense, net | (645 | ) | (1,134 | ) | (873 | ) | |||||
Income Before Income Taxes | 7,157 | 1,072 | 2,527 | ||||||||
Income Tax (Provision) Benefit | (2,631 | ) | (413 | ) | 8,013 | ||||||
Net Income | $ | 4,526 | $ | 659 | $ | 10,540 | |||||
Basic Earnings Per Share | $ | 5.68 | $ | 0.79 | $ | 12.41 | |||||
Diluted Earnings Per Share | $ | 5.63 | $ | 0.78 | $ | 12.29 | |||||
Cash Dividends Declared Per Share | $ | 0.45 | $ | 0.30 | $ | 0.12 | |||||
The accompanying notes are an integral part of these Consolidated Financial Statements. |
Year Ended December 31, | |||||||||||
(in millions) | 2015 | 2014 | 2013 | ||||||||
Net Income | $ | 4,526 | $ | 659 | $ | 10,540 | |||||
Other comprehensive income (loss): | |||||||||||
Net (loss) gain on foreign currency and interest rate derivatives | (82 | ) | 3 | 482 | |||||||
Net change in pension and other benefits | 163 | (2,194 | ) | 2,984 | |||||||
Net (loss) gain on investments | (45 | ) | 10 | (19 | ) | ||||||
Total Other Comprehensive Income (Loss) | 36 | (2,181 | ) | 3,447 | |||||||
Comprehensive Income (Loss) | $ | 4,562 | $ | (1,522 | ) | $ | 13,987 |
Year Ended December 31, | |||||||||||
(in millions) | 2015 | 2014 | 2013 | ||||||||
Cash Flows From Operating Activities: | |||||||||||
Net income | $ | 4,526 | $ | 659 | $ | 10,540 | |||||
Adjustments to reconcile net income to net cash provided by operating activities: | |||||||||||
Depreciation and amortization | 1,835 | 1,771 | 1,658 | ||||||||
Hedge derivative contracts | (1,366 | ) | 2,186 | (86 | ) | ||||||
Deferred income taxes | 2,581 | 414 | (7,991 | ) | |||||||
Pension, postretirement and postemployment payments greater than expense | (1,013 | ) | (723 | ) | (624 | ) | |||||
Restructuring and other | 35 | 758 | 285 | ||||||||
Extinguishment of debt | 22 | 268 | — | ||||||||
Equity investment (earnings) loss | (35 | ) | 106 | (24 | ) | ||||||
SkyMiles used pursuant to advance purchase under American Express Agreements | — | — | (333 | ) | |||||||
Changes in certain assets and liabilities: | |||||||||||
Receivables | (56 | ) | (302 | ) | 90 | ||||||
Restricted cash and cash equivalents | 7 | 62 | 231 | ||||||||
Fuel inventory | 155 | 172 | (87 | ) | |||||||
Hedge margin | 806 | (922 | ) | 14 | |||||||
Prepaid expenses and other current assets | (102 | ) | 58 | 28 | |||||||
Air traffic liability | 207 | 174 | 426 | ||||||||
Frequent flyer deferred revenue | (301 | ) | (238 | ) | (121 | ) | |||||
Profit sharing | 734 | 264 | 133 | ||||||||
Accounts payable and accrued liabilities | (201 | ) | (36 | ) | 80 | ||||||
Other, net | 93 | 276 | 285 | ||||||||
Net cash provided by operating activities | 7,927 | 4,947 | 4,504 | ||||||||
Cash Flows From Investing Activities: | |||||||||||
Property and equipment additions: | |||||||||||
Flight equipment, including advance payments | (2,223 | ) | (1,662 | ) | (2,117 | ) | |||||
Ground property and equipment, including technology | (722 | ) | (587 | ) | (404 | ) | |||||
Purchase of equity investments | (500 | ) | — | (360 | ) | ||||||
Purchase of short-term investments | (998 | ) | (1,795 | ) | (959 | ) | |||||
Redemption of short-term investments | 739 | 1,533 | 1,117 | ||||||||
Acquisition of London-Heathrow slots | (276 | ) | — | (47 | ) | ||||||
Other, net | 25 | 48 | 14 | ||||||||
Net cash used in investing activities | (3,955 | ) | (2,463 | ) | (2,756 | ) | |||||
Cash Flows From Financing Activities: | |||||||||||
Payments on long-term debt and capital lease obligations | (2,558 | ) | (2,928 | ) | (1,461 | ) | |||||
Repurchase of common stock | (2,200 | ) | (1,100 | ) | (250 | ) | |||||
Cash dividends | (359 | ) | (251 | ) | (102 | ) | |||||
Fuel card obligation | (340 | ) | (41 | ) | 147 | ||||||
Payments on hedge derivative contracts | (71 | ) | — | — | |||||||
Proceeds from hedge derivative contracts | 429 | — | — | ||||||||
Proceeds from long-term obligations | 1,038 | 1,020 | 268 | ||||||||
Other, net | (27 | ) | 60 | 78 | |||||||
Net cash used in financing activities | (4,088 | ) | (3,240 | ) | (1,320 | ) | |||||
Net (Decrease) Increase in Cash and Cash Equivalents | (116 | ) | (756 | ) | 428 | ||||||
Cash and cash equivalents at beginning of period | 2,088 | 2,844 | 2,416 | ||||||||
Cash and cash equivalents at end of period | $ | 1,972 | $ | 2,088 | $ | 2,844 | |||||
Supplemental Disclosure of Cash Paid for Interest | $ | 452 | $ | 560 | $ | 698 | |||||
Non-Cash Transactions: | |||||||||||
Flight equipment under capital leases | $ | 111 | $ | 28 | $ | 67 | |||||
Build-to-suit leased facilities | 5 | 7 | 114 | ||||||||
American Express advance purchase of restricted SkyMiles | — | — | 285 | ||||||||
The accompanying notes are an integral part of these Consolidated Financial Statements. |
Common Stock | Additional Paid-In Capital | Retained Earnings (Accumulated Deficit) | Accumulated Other Comprehensive Loss | Treasury Stock | ||||||||||||||||||
(in millions, except per share data) | Shares | Amount | Shares | Amount | Total | |||||||||||||||||
Balance at January 1, 2013 | 868 | $ | — | $ | 14,069 | $ | (7,389 | ) | $ | (8,577 | ) | 16 | $ | (234 | ) | $ | (2,131 | ) | ||||
Net income | — | — | — | 10,540 | — | — | — | 10,540 | ||||||||||||||
Dividends declared | — | — | — | (102 | ) | — | — | — | (102 | ) | ||||||||||||
Other comprehensive income | — | — | — | — | 3,447 | — | — | 3,447 | ||||||||||||||
Shares of common stock issued and compensation expense associated with equity awards (Treasury shares withheld for payment of taxes, $14.97(1) per share) | 5 | — | 90 | — | — | 2 | (24 | ) | 66 | |||||||||||||
Stock options exercised | 6 | — | 73 | — | — | — | — | 73 | ||||||||||||||
Stock purchased and retired | (10 | ) | — | (250 | ) | — | — | — | — | (250 | ) | |||||||||||
Balance at December 31, 2013 | 869 | — | 13,982 | 3,049 | (5,130 | ) | 18 | (258 | ) | 11,643 | ||||||||||||
Net income | — | — | — | 659 | — | — | — | 659 | ||||||||||||||
Dividends declared | — | — | — | (252 | ) | — | — | — | (252 | ) | ||||||||||||
Other comprehensive loss | — | — | — | — | (2,181 | ) | — | — | (2,181 | ) | ||||||||||||
Shares of common stock issued and compensation expense associated with equity awards (Treasury shares withheld for payment of taxes, $31.46(1) per share) | 3 | — | 81 | — | — | 2 | (55 | ) | 26 | |||||||||||||
Stock options exercised | 2 | — | 18 | — | — | — | — | 18 | ||||||||||||||
Stock purchased and retired | (29 | ) | — | (1,100 | ) | — | — | — | — | (1,100 | ) | |||||||||||
Balance at December 31, 2014 | 845 | — | 12,981 | 3,456 | (7,311 | ) | 20 | (313 | ) | 8,813 | ||||||||||||
Net income | — | — | — | 4,526 | — | — | — | 4,526 | ||||||||||||||
Dividends declared | — | — | — | (359 | ) | — | — | — | (359 | ) | ||||||||||||
Other comprehensive income | — | — | — | — | 36 | — | — | 36 | ||||||||||||||
Shares of common stock issued and compensation expense associated with equity awards (Treasury shares withheld for payment of taxes, $46.83(1) per share) | 1 | — | 76 | — | — | 1 | (60 | ) | 16 | |||||||||||||
Stock options exercised | 2 | — | 18 | — | — | — | — | 18 | ||||||||||||||
Stock purchased and retired | (48 | ) | — | (2,200 | ) | — | — | — | — | (2,200 | ) | |||||||||||
Balance at December 31, 2015 | 800 | $ | — | $ | 10,875 | $ | 7,623 | $ | (7,275 | ) | 21 | $ | (373 | ) | $ | 10,850 |
(1) | Weighted average price per share |
Derivative Type | Hedged Risk | Classification of Gains and Losses |
Fuel hedge contracts | Increases in jet fuel prices | Aircraft fuel and related taxes |
Interest rate contracts | Increases in interest rates | Interest expense, net |
Foreign currency exchange contracts | Fluctuations in foreign currency exchange rates | Passenger revenue |
Impact of Unrealized Gains and Losses | ||
Accounting Designation | Effective Portion | Ineffective Portion |
Not designated as hedges | Change in fair value of hedge is recorded in earnings | |
Designated as cash flow hedges | Market adjustments are recorded in AOCI | Excess, if any, over effective portion of hedge is recorded in other expense |
Designated as fair value hedges | Market adjustments are recorded in long-term debt and capital leases | Excess, if any, over effective portion of hedge is recorded in other expense |
December 31, | |||||||
(in millions, except for estimated useful life) | Estimated Useful Life | 2015 | 2014 | ||||
Flight equipment | 20-32 years | $ | 26,057 | $ | 24,313 | ||
Ground property and equipment | 3-40 years | 5,862 | 5,198 | ||||
Flight and ground equipment under capital leases | Shorter of lease term or estimated useful life | 1,112 | 1,141 | ||||
Advance payments for equipment | 879 | 617 | |||||
Less: accumulated depreciation and amortization(1) | (10,871 | ) | (9,340 | ) | |||
Total property and equipment, net | $ | 23,039 | $ | 21,929 |
(1) | Includes accumulated amortization for flight and ground equipment under capital leases in the amount of $782 million and $767 million at December 31, 2015 and 2014, respectively. |
• | Level 1. Observable inputs such as quoted prices in active markets; |
• | Level 2. Inputs, other than quoted prices in active markets, that are observable either directly or indirectly; and |
• | Level 3. Unobservable inputs in which there is little or no market data, which require the reporting entity to develop its own assumptions. |
(a) | Market approach. Prices and other relevant information generated by market transactions involving identical or comparable assets or liabilities; and |
(b) | Income approach. Techniques to convert future amounts to a single present amount based on market expectations (including present value techniques, option-pricing and excess earnings models). |
December 31, 2015 | Valuation Technique | |||||||||
(in millions) | Total | Level 1 | Level 2 | |||||||
Cash equivalents | $ | 1,543 | $ | 1,543 | $ | — | (a) | |||
Short-term investments | ||||||||||
U.S. government and agency securities | 151 | 74 | 77 | (a) | ||||||
Asset- and mortgage-backed securities | 380 | — | 380 | (a) | ||||||
Corporate obligations | 896 | — | 896 | (a) | ||||||
Other fixed income securities | 38 | — | 38 | (a) | ||||||
Restricted cash equivalents and investments | 49 | 49 | — | (a) | ||||||
Long-term investments | 155 | 130 | 25 | (a) | ||||||
Hedge derivatives, net | ||||||||||
Fuel hedge contracts | (672 | ) | 65 | (737 | ) | (a)(b) | ||||
Interest rate contract | (3 | ) | — | (3 | ) | (a)(b) | ||||
Foreign currency exchange contracts | 94 | — | 94 | (a) |
December 31, 2014 | Valuation Technique | |||||||||
(in millions) | Total | Level 1 | Level 2 | |||||||
Cash equivalents | $ | 1,612 | $ | 1,612 | $ | — | (a) | |||
Short-term investments | ||||||||||
U.S. government securities | 59 | — | 59 | (a) | ||||||
Asset- and mortgage-backed securities | 392 | — | 392 | (a) | ||||||
Corporate obligations | 749 | — | 749 | (a) | ||||||
Other fixed income securities | 17 | — | 17 | (a) | ||||||
Restricted cash equivalents and investments | 37 | 37 | — | (a) | ||||||
Long-term investments | 118 | 90 | 28 | (a) | ||||||
Hedge derivatives, net | ||||||||||
Fuel hedge contracts | (1,848 | ) | (167 | ) | (1,681 | ) | (a)(b) | |||
Interest rate contract | (7 | ) | — | (7 | ) | (a)(b) | ||||
Foreign currency exchange contracts | 73 | — | 73 | (a) |
(1) | See Note 9, “Employee Benefit Plans,” for fair value of benefit plan assets. |
• | Fuel Contracts. Our fuel hedge portfolio consists of options, swaps and futures. The hedge contracts include crude oil, diesel fuel and jet fuel, as these commodities are highly correlated with the price of jet fuel that we consume. Option contracts are valued under an income approach using option pricing models based on data either readily observable in public markets, derived from public markets or provided by counterparties who regularly trade in public markets. Volatilities used in these valuations ranged from 31% to 53% depending on the maturity dates, underlying commodities and strike prices of the option contracts. Swap contracts are valued under an income approach using a discounted cash flow model based on data either readily observable or provided by counterparties who regularly trade in public markets. Discount rates used in these valuations vary with the maturity dates of the respective contracts and are based on the London interbank offered rate ("LIBOR"). Futures contracts and options on futures contracts are traded on a public exchange and valued based on quoted market prices. |
• | Interest Rate Contract. Our interest rate derivative is a swap contract, which is valued based on data readily observable in public markets. |
• | Foreign Currency Exchange Contracts. Our foreign currency derivatives consist of Japanese yen and Canadian dollar forward contracts and are valued based on data readily observable in public markets. |
(in millions) | Available- For-Sale | ||||
Due in one year or less | $ | 344 | |||
Due after one year through three years | 905 | ||||
Due after three years through five years | 116 | ||||
Due after five years | 100 | ||||
Total | $ | 1,465 |
• | Aeroméxico. In order to expand our economic interest in Aeroméxico, we entered into a derivative contract for 58.9 million shares of Aeroméxico's parent company. Through the interest in the derivative, we will participate in the increases and decreases in value of the shares and record those changes in other expense on the Consolidated Statements of Operations. At the maturity date of the derivative contract, we may acquire all or a portion of the shares or settle in cash. If the derivative term is not extended, the derivative will mature in May 2016. We have also announced our intention to commence a tender offer for additional capital stock of Grupo Aeroméxico (the parent company of Aeroméxico) that would result in us owning up to 49% of the outstanding shares. |
• | GOL. During 2015, we acquired preferred shares of GOL's parent company for $50 million, increasing our ownership to 9.5% of GOL's outstanding capital stock. Additionally, GOL entered into a $300 million five-year term loan facility with third parties, which we have guaranteed. Our guaranty is primarily secured by GOL's ownership interest in Smiles, GOL's publicly-traded loyalty program. As GOL remains in compliance with the terms of its loan facility, we have not recorded a liability on our Consolidated Balance Sheets as of December 31, 2015. In conjunction with these transactions, we and GOL agreed to extend our existing commercial agreements. |
• | China Eastern. During 2015, we acquired shares of China Eastern for $450 million, which provides us with a 3.5% stake in the airline as of December 31, 2015. In conjunction with this transaction, we and China Eastern entered into a new commercial agreement to expand our relationship and better connect the networks of the two airlines. As the investment agreement restricts our sale or transfer of these shares for a period of three years, we will account for the investment at cost during this period. Although China Eastern shares are actively traded on a public exchange, it is not practicable to estimate the fair value of the investment due to the restriction on our ability to sell or transfer the shares. |
(in millions) | Volume | Final Maturity Date | Hedge Derivatives Asset | Other Noncurrent Assets | Hedge Derivatives Liability | Other Noncurrent Liabilities | Hedge Derivatives, net | ||||||||||||
Designated as hedges | |||||||||||||||||||
Interest rate contract (fair value hedge) | 384 | U.S. dollars | August 2022 | $ | 4 | $ | — | $ | — | $ | (7 | ) | $ | (3 | ) | ||||
Foreign currency exchange contracts | 46,920 | Japanese yen | July 2018 | 76 | 20 | (1 | ) | (1 | ) | 94 | |||||||||
395 | Canadian dollars | ||||||||||||||||||
Not designated as hedges | |||||||||||||||||||
Fuel hedge contracts | 887 | gallons - crude oil, diesel and jet fuel | November 2017 | 1,907 | 4 | (2,580 | ) | (3 | ) | (672 | ) | ||||||||
Total derivative contracts | $ | 1,987 | $ | 24 | $ | (2,581 | ) | $ | (11 | ) | $ | (581 | ) |
(in millions) | Volume | Final Maturity Date | Hedge Derivatives Asset | Other Noncurrent Assets | Hedge Derivatives Liability | Other Noncurrent Liabilities | Hedge Derivatives, net | ||||||||||||
Designated as hedges | |||||||||||||||||||
Interest rate contract (fair value hedge) | 416 | U.S. dollars | August 2022 | $ | 5 | $ | — | $ | — | $ | (12 | ) | $ | (7 | ) | ||||
Foreign currency exchange contracts | 77,576 | Japanese yen | October 2017 | 25 | 49 | (1 | ) | — | 73 | ||||||||||
511 | Canadian dollars | ||||||||||||||||||
Not designated as hedges | |||||||||||||||||||
Fuel hedge contracts | 3,286 | gallons - crude oil, diesel and jet fuel | December 2016 | 1,048 | 3 | (2,771 | ) | (128 | ) | (1,848 | ) | ||||||||
Total derivative contracts | $ | 1,078 | $ | 52 | $ | (2,772 | ) | $ | (140 | ) | $ | (1,782 | ) |
(in millions) | Hedge Derivatives Asset | Other Noncurrent Assets | Hedge Derivatives Liability | Other Noncurrent Liabilities | Hedge Derivatives, Net | ||||||||||
December 31, 2015 | |||||||||||||||
Net derivative contracts | $ | 143 | $ | 21 | $ | (737 | ) | $ | (8 | ) | $ | (581 | ) | ||
December 31, 2014 | |||||||||||||||
Net derivative contracts | $ | 29 | $ | 49 | $ | (1,723 | ) | $ | (137 | ) | $ | (1,782 | ) |
Effective Portion Reclassified from AOCI to Earnings | Effective Portion Recognized in Other Comprehensive (Loss) Income | ||||||||||||||||||
(in millions) | 2015 | 2014 | 2013 | 2015 | 2014 | 2013 | |||||||||||||
Interest rate contracts | $ | — | $ | (31 | ) | $ | — | $ | — | $ | 38 | $ | 28 | ||||||
Foreign currency exchange contracts | 198 | 158 | 135 | (130 | ) | (34 | ) | 133 | |||||||||||
Total designated | $ | 198 | $ | 127 | $ | 135 | $ | (130 | ) | $ | 4 | $ | 161 |
Carrying Value at December 31, | ||||||
(in millions) | 2015 | 2014 | ||||
International routes and slots | $ | 2,563 | $ | 2,287 | ||
Delta tradename | 850 | 850 | ||||
SkyTeam-related assets | 661 | 661 | ||||
Domestic slots | 622 | 622 | ||||
Total | $ | 4,696 | $ | 4,420 |
December 31, 2015 | December 31, 2014 | ||||||||||||
(in millions) | Gross Carrying Value | Accumulated Amortization | Gross Carrying Value | Accumulated Amortization | |||||||||
Marketing agreements | $ | 730 | $ | (658 | ) | $ | 730 | $ | (648 | ) | |||
Contracts | 193 | (100 | ) | 193 | (92 | ) | |||||||
Other | 53 | (53 | ) | 53 | (53 | ) | |||||||
Total | $ | 976 | $ | (811 | ) | $ | 976 | $ | (793 | ) |
Maturity | Interest Rate(s) Per Annum at | December 31, | ||||||||||
(in millions) | Dates | December 31, 2015 | 2015 | 2014 | ||||||||
Pacific Facilities(1): | ||||||||||||
Pacific Term Loan B-1(2) | October 2018 | 3.25% | variable(4) | $ | 1,067 | $ | 1,078 | |||||
Pacific Term Loan B-2(2) | April 2016 | 2.67% | variable(4) | 388 | 392 | |||||||
Pacific Revolving Credit Facility | 2017 | to | 2018 | undrawn | variable(4) | — | — | |||||
2015 Credit Facilities(1): | ||||||||||||
Term Loan Facility(2) | August 2022 | 3.25% | variable(4) | 499 | — | |||||||
Revolving Credit Facility | August 2020 | undrawn | variable(4) | — | — | |||||||
2011 Credit Facilities: | ||||||||||||
Term Loan Facility | n/a | n/a | n/a | — | 1,327 | |||||||
Revolving Credit Facility | n/a | n/a | n/a | — | — | |||||||
Financing arrangements secured by aircraft: | ||||||||||||
Certificates(3) | 2016 | to | 2027 | 3.63% | to | 9.75% | 3,264 | 3,226 | ||||
Notes(3) | 2016 | to | 2027 | 0.83% | to | 6.76% | 2,564 | 2,988 | ||||
Other financings(3)(5) | 2016 | to | 2031 | 2.24% | to | 8.75% | 316 | 458 | ||||
Other revolving credit facilities(1) | 2016 | to | 2017 | undrawn | variable(4) | — | — | |||||
Total secured and unsecured debt | 8,098 | 9,469 | ||||||||||
Unamortized discount and debt issue cost, net | (152 | ) | (206 | ) | ||||||||
Total debt | 7,946 | 9,263 | ||||||||||
Less: current maturities | (1,415 | ) | (1,075 | ) | ||||||||
Total long-term debt | $ | 6,531 | $ | 8,188 |
(1) | Guaranteed by substantially all of our domestic subsidiaries (the "Guarantors"). |
(2) | Borrowings must be repaid annually in an amount equal to 1% per year of the original principal amount (paid in equal quarterly installments), with the balance due on the final maturity date. |
(3) | Due in installments. |
(4) | Interest rate equal to LIBOR (generally subject to a floor) or another index rate, in each case plus a specified margin. Additionally, certain aircraft and other financings are comprised of variable rate debt. |
(5) | Primarily includes loans secured by certain accounts receivable and real estate. |
(in millions) | Total Principal | Fixed Interest Rate | Issuance Date | Final Maturity Date | ||
2015-1 Class AA Certificates | $ | 313 | 3.625% | August 2015 | July 2027 | |
2015-1 Class A Certificates | 69 | 3.875% | August 2015 | July 2027 | ||
2015-1 Class B Certificates | 118 | 4.250% | August 2015 | July 2023 | ||
Total | $ | 500 |
Minimum unrestricted liquidity | |
Unrestricted cash, permitted investments and undrawn revolving credit facilities | $2.0 billion |
Minimum collateral coverage ratio(1) | 1.60:1 |
(1) | Defined as the ratio of (a) certain of the collateral that meet specified eligibility standards to (b) the sum of the aggregate outstanding obligations under the 2015 Credit Facilities and certain other obligations. |
Minimum fixed charge coverage ratio (1) | 1.20:1 |
Minimum unrestricted liquidity | |
Unrestricted cash, permitted investments and undrawn revolving credit facilities | $2.0 billion |
Minimum collateral coverage ratio (2) | 1.60:1 |
(1) | Defined as the ratio of (a) earnings before interest, taxes, depreciation, amortization and aircraft rent and other adjustments to net income to (b) the sum of gross cash interest expense (including the interest portion of our capitalized lease obligations) and cash aircraft rent expense, for the 12-month period ending as of the last day of each fiscal quarter. |
(2) | Defined as the ratio of (a) certain of the collateral that meet specified eligibility standards to (b) the sum of the aggregate outstanding obligations and certain other obligations. |
(in millions) | |||
Revolving Credit Facility | $ | 1,500 | |
Pacific Revolving Credit Facility | 450 | ||
Other revolving credit facilities | 257 | ||
Total availability under revolving credit facilities | $ | 2,207 |
(in millions) | Total Debt | Amortization of Debt Discount and Debt Issue Cost, net | |||||||||
2016 | $ | 1,442 | $ | (40 | ) | ||||||
2017 | 869 | (39 | ) | ||||||||
2018 | 2,061 | (35 | ) | ||||||||
2019 | 1,189 | (22 | ) | ||||||||
2020 | 456 | (4 | ) | ||||||||
Thereafter | 2,081 | (12 | ) | ||||||||
Total | $ | 8,098 | $ | (152 | ) | $ | 7,946 |
December 31, | ||||||
(in millions) | 2015 | 2014 | ||||
Total debt at par value | $ | 8,098 | $ | 9,469 | ||
Unamortized discount and debt issue cost, net | (152 | ) | (206 | ) | ||
Net carrying amount | $ | 7,946 | $ | 9,263 | ||
Fair value | $ | 8,400 | $ | 9,800 |
(in millions) | Total | ||
2016 | $ | 183 | |
2017 | 114 | ||
2018 | 56 | ||
2019 | 41 | ||
2020 | 29 | ||
Thereafter | 39 | ||
Total minimum lease payments | 462 | ||
Less: amount of lease payments representing interest | (79 | ) | |
Present value of future minimum capital lease payments | 383 | ||
Less: current obligations under capital leases | (148 | ) | |
Long-term capital lease obligations | $ | 235 |
(in millions) | Delta Lease Payments(1) | Contract Carrier Aircraft Lease Payments(2) | Total | ||||||
2016 | $ | 1,258 | $ | 325 | $ | 1,583 | |||
2017 | 1,105 | 335 | 1,440 | ||||||
2018 | 993 | 314 | 1,307 | ||||||
2019 | 899 | 259 | 1,158 | ||||||
2020 | 814 | 239 | 1,053 | ||||||
Thereafter | 5,839 | 381 | 6,220 | ||||||
Total minimum lease payments | $ | 10,908 | $ | 1,853 | $ | 12,761 |
(1) | Includes payments accounted for as construction obligations. |
(2) | Represents the minimum lease obligations under our contract carrier agreements with Compass Airlines, LLC, ExpressJet Airlines, Inc., GoJet Airlines, LLC, Shuttle America Corporation (“Shuttle America”) and SkyWest Airlines, Inc. |
Pension Benefits | Other Postretirement and Postemployment Benefits | ||||||||||||
December 31, | December 31, | ||||||||||||
(in millions) | 2015 | 2014 | 2015 | 2014 | |||||||||
Benefit obligation at beginning of period | $ | 21,856 | $ | 19,060 | $ | 3,487 | $ | 3,205 | |||||
Service cost | — | — | 62 | 52 | |||||||||
Interest cost | 884 | 928 | 141 | 155 | |||||||||
Actuarial (gain) loss | (1,061 | ) | 2,923 | (88 | ) | 338 | |||||||
Benefits paid, including lump sums and annuities | (1,059 | ) | (1,055 | ) | (302 | ) | (307 | ) | |||||
Participant contributions | — | — | 36 | 44 | |||||||||
Settlements | (9 | ) | — | — | — | ||||||||
Benefit obligation at end of period(1) | $ | 20,611 | $ | 21,856 | $ | 3,336 | $ | 3,487 | |||||
Fair value of plan assets at beginning of period | $ | 9,355 | $ | 8,937 | $ | 982 | $ | 1,043 | |||||
Actual (loss) gain on plan assets | (132 | ) | 556 | (25 | ) | 57 | |||||||
Employer contributions | 1,219 | 917 | 210 | 160 | |||||||||
Participant contributions | — | — | 36 | 44 | |||||||||
Benefits paid, including lump sums and annuities | (1,059 | ) | (1,055 | ) | (319 | ) | (322 | ) | |||||
Settlements | (9 | ) | — | — | — | ||||||||
Fair value of plan assets at end of period | $ | 9,374 | $ | 9,355 | $ | 884 | $ | 982 | |||||
Funded status at end of period | $ | (11,237 | ) | $ | (12,501 | ) | $ | (2,452 | ) | $ | (2,505 | ) |
(1) | At the end of each year presented, our accumulated benefit obligations for our pension plans are equal to the benefit obligations shown above. |
Pension Benefits | Other Postretirement and Postemployment Benefits | ||||||||||||
December 31, | December 31, | ||||||||||||
(in millions) | 2015 | 2014 | 2015 | 2014 | |||||||||
Current liabilities | $ | (27 | ) | $ | (28 | ) | $ | (139 | ) | $ | (139 | ) | |
Noncurrent liabilities | (11,210 | ) | (12,473 | ) | (2,313 | ) | (2,366 | ) | |||||
Total liabilities | $ | (11,237 | ) | $ | (12,501 | ) | $ | (2,452 | ) | $ | (2,505 | ) | |
Net actuarial loss | $ | (8,124 | ) | $ | (8,409 | ) | $ | (458 | ) | $ | (465 | ) | |
Prior service credit | — | — | 109 | 135 | |||||||||
Total accumulated other comprehensive loss, pre-tax | $ | (8,124 | ) | $ | (8,409 | ) | $ | (349 | ) | $ | (330 | ) |
Pension Benefits | Other Postretirement and Postemployment Benefits | ||||||||||||||||||
Year Ended December 31, | Year Ended December 31, | ||||||||||||||||||
(in millions) | 2015 | 2014 | 2013 | 2015 | 2014 | 2013 | |||||||||||||
Service cost | $ | — | $ | — | $ | — | $ | 62 | $ | 52 | $ | 49 | |||||||
Interest cost | 884 | 928 | 861 | 141 | 155 | 143 | |||||||||||||
Expected return on plan assets | (879 | ) | (829 | ) | (734 | ) | (81 | ) | (84 | ) | (84 | ) | |||||||
Amortization of prior service credit | — | — | — | (26 | ) | (26 | ) | (26 | ) | ||||||||||
Recognized net actuarial loss | 232 | 134 | 221 | 24 | 4 | 25 | |||||||||||||
Settlements | 3 | — | 6 | — | — | — | |||||||||||||
Net periodic cost | $ | 240 | $ | 233 | $ | 354 | $ | 120 | $ | 101 | $ | 107 | |||||||
Defined contribution plan costs | 592 | 551 | 490 | — | — | — | |||||||||||||
Total cost | $ | 832 | $ | 784 | $ | 844 | $ | 120 | $ | 101 | $ | 107 |
December 31, | ||||
Benefit Obligations(1)(2) | 2015 | 2014 | ||
Weighted average discount rate | 4.57 | % | 4.14 | % |
Year Ended December 31, | ||||||
Net Periodic Cost(2) | 2015 | 2014 | 2013 | |||
Weighted average discount rate - pension benefit | 4.13 | % | 4.99 | % | 4.10 | % |
Weighted average discount rate - other postretirement benefit(3) | 4.13 | % | 4.88 | % | 4.00 | % |
Weighted average discount rate - other postemployment benefit | 4.13 | % | 5.00 | % | 4.13 | % |
Weighted average expected long-term rate of return on plan assets | 8.94 | % | 8.94 | % | 8.94 | % |
Assumed healthcare cost trend rate(4) | 7.00 | % | 7.00 | % | 7.00 | % |
(1) | Our 2015 and 2014 benefit obligations are measured using a mortality table projected to 2022. |
(2) | Future compensation levels do not impact our frozen defined benefit pension plans or other postretirement plans and impact only a small portion of our other postemployment liability. |
(3) | Our assumptions reflect various remeasurements of certain portions of our obligations and represent the weighted average of the assumptions used for each measurement date. |
(4) | Assumed healthcare cost trend rate at December 31, 2015 is assumed to decline gradually to 5.00% by 2024 and remain level thereafter. |
(in millions) | 1% Increase | 1% Decrease | ||||
Increase (decrease) in total service and interest cost | $ | 1 | $ | (1 | ) | |
Increase (decrease) in the accumulated plan benefit obligation | 12 | (25 | ) |
(in millions) | Pension Benefits | Other Postretirement and Postemployment Benefits | ||||
2016 | $ | 1,154 | $ | 286 | ||
2017 | 1,158 | 281 | ||||
2018 | 1,180 | 271 | ||||
2019 | 1,199 | 267 | ||||
2020 | 1,219 | 268 | ||||
2021-2025 | 6,343 | 1,335 |
December 31, 2015 | December 31, 2014 | Valuation Technique | |||||||||||||||||||||||||
(in millions) | Level 1 | Level 2 | Level 3 | Total | Level 1 | Level 2 | Level 3 | Total | |||||||||||||||||||
Equities and equity-related instruments | $ | 2,067 | $ | 50 | $ | 101 | $ | 2,218 | $ | 699 | $ | 1,486 | $ | — | $ | 2,185 | (a) | ||||||||||
Fixed income and fixed income-related instruments | |||||||||||||||||||||||||||
Sovereign fixed income | 8 | 78 | — | 86 | — | — | — | — | (a)(b) | ||||||||||||||||||
Credit-related fixed income | — | 761 | 97 | 858 | — | 470 | 124 | 594 | (a)(b) | ||||||||||||||||||
Other fixed income | 8 | 143 | 23 | 174 | 18 | 617 | — | 635 | (a)(b) | ||||||||||||||||||
Private equity | — | — | 1,030 | 1,030 | — | — | 1,213 | 1,213 | (a)(b) | ||||||||||||||||||
Real assets | — | — | 635 | 635 | — | — | 663 | 663 | (a)(b) | ||||||||||||||||||
Hedge funds | — | 19 | 2,971 | 2,990 | 31 | — | 2,214 | 2,245 | (a)(b) | ||||||||||||||||||
Cash equivalents | — | 1,700 | — | 1,700 | 4 | 2,428 | — | 2,432 | (a) | ||||||||||||||||||
Other | — | 2 | 337 | 339 | — | — | 384 | 384 | (a)(b) | ||||||||||||||||||
Total benefit plan assets | $ | 2,083 | $ | 2,753 | $ | 5,194 | $ | 10,030 | $ | 752 | $ | 5,001 | $ | 4,598 | $ | 10,351 |
(in millions) | Private Equity | Real Estate | Hedge Funds | Fixed Income | Other | Total | ||||||||||||
Balance at January 1, 2014 | $ | 1,366 | $ | 688 | $ | 552 | $ | 59 | $ | — | $ | 2,665 | ||||||
Actual return on plan assets: | ||||||||||||||||||
Related to assets still held at the reporting date | (116 | ) | (39 | ) | 167 | (17 | ) | (9 | ) | (14 | ) | |||||||
Related to assets sold during the period | 107 | 37 | 38 | 1 | — | 183 | ||||||||||||
Purchases, sales and settlements, net | (144 | ) | (23 | ) | 1,457 | 81 | 393 | 1,764 | ||||||||||
Balance at December 31, 2014 | 1,213 | 663 | 2,214 | 124 | 384 | 4,598 | ||||||||||||
Actual return on plan assets: | ||||||||||||||||||
Related to assets still held at the reporting date | (148 | ) | (50 | ) | 22 | (22 | ) | (39 | ) | (237 | ) | |||||||
Related to assets sold during the period | 247 | 69 | 33 | 9 | 1 | 359 | ||||||||||||
Purchases, sales and settlements, net | (282 | ) | (47 | ) | 702 | 9 | 92 | 474 | ||||||||||
Balance at December 31, 2015 | $ | 1,030 | $ | 635 | $ | 2,971 | $ | 120 | $ | 438 | $ | 5,194 |
(in millions) | Total | ||
2016 | $ | 2,140 | |
2017 | 2,500 | ||
2018 | 2,510 | ||
2019 | 1,500 | ||
2020 | 1,900 | ||
Thereafter | 3,010 | ||
Total | $ | 13,560 |
(in millions) | Amount(1) | ||
2016 | $ | 2,160 | |
2017 | 2,270 | ||
2018 | 2,110 | ||
2019 | 1,960 | ||
2020 | 1,650 | ||
Thereafter | 2,170 | ||
Total | $ | 12,320 |
(1) | These amounts exclude contract carrier payments accounted for as operating leases of aircraft, which are described in Note 7. The contingencies described below under “Contingencies Related to Termination of Shuttle America Agreements” are also excluded from this table. |
Employee Group | Approximate Number of Active Employees Represented | Union | Date on which Collective Bargaining Agreement Becomes Amendable | |
Delta Pilots | 12,080 | ALPA | December 31, 2015(1) | |
Delta Flight Superintendents (Dispatchers) | 400 | PAFCA | March 31, 2018 | |
Endeavor Air Pilots | 1,360 | ALPA | January 1, 2020 | |
Endeavor Air Flight Attendants | 895 | AFA | December 31, 2018 | |
Endeavor Air Dispatchers | 50 | DISTWU | December 31, 2018 |
(1) | We are in discussions with representatives of the Delta Pilots regarding terms of an amended collective bargaining agreement. |
Year Ended December 31, | |||||||||
(in millions) | 2015 | 2014 | 2013 | ||||||
Current tax (provision) benefit: | |||||||||
Federal | $ | (23 | ) | $ | 21 | $ | 24 | ||
State and local | (25 | ) | (9 | ) | (3 | ) | |||
International | (2 | ) | (11 | ) | 1 | ||||
Deferred tax (provision) benefit: | |||||||||
Federal | (2,409 | ) | (424 | ) | 7,197 | ||||
State and local | (172 | ) | 10 | 794 | |||||
Income tax (provision) benefit | $ | (2,631 | ) | $ | (413 | ) | $ | 8,013 |
Year Ended December 31, | ||||||
2015 | 2014 | 2013 | ||||
U.S. federal statutory income tax rate | 35.0 | % | 35.0 | % | 35.0 | % |
State taxes, net of federal benefit | 1.8 | 2.0 | 3.0 | |||
Decrease in valuation allowance | (0.2 | ) | (2.4 | ) | (367.5 | ) |
Income tax allocation | — | — | 12.7 | |||
Other | 0.2 | 3.9 | (0.4 | ) | ||
Effective income tax rate | 36.8 | % | 38.5 | % | (317.2 | )% |
December 31, | ||||||
(in millions) | 2015 | 2014 | ||||
Deferred tax assets: | ||||||
Net operating loss carryforwards | $ | 3,838 | $ | 4,782 | ||
Pension, postretirement and other benefits | 5,444 | 6,033 | ||||
Fuel derivatives MTM adjustments | 282 | 777 | ||||
AMT credit carryforward | 379 | 357 | ||||
Deferred revenue | 1,522 | 1,824 | ||||
Other | 1,047 | 659 | ||||
Valuation allowance | (56 | ) | (46 | ) | ||
Total deferred tax assets | $ | 12,456 | $ | 14,386 | ||
Deferred tax liabilities: | ||||||
Depreciation | $ | 5,490 | $ | 4,663 | ||
Intangible assets | 1,681 | 1,684 | ||||
Other | 329 | 444 | ||||
Total deferred tax liabilities | $ | 7,500 | $ | 6,791 | ||
Net deferred tax assets | $ | 4,956 | $ | 7,595 |
(in millions) | 2015 | 2014 | 2013 | ||||||
Valuation allowance at beginning of period | $ | 46 | $ | 177 | $ | 10,963 | |||
Income tax provision | — | (9 | ) | (975 | ) | ||||
Other comprehensive income tax benefit (provision) | 24 | (3 | ) | (1,186 | ) | ||||
Expirations | (4 | ) | (91 | ) | — | ||||
Release of valuation allowance | (10 | ) | (28 | ) | (8,310 | ) | |||
Other | — | — | (315 | ) | |||||
Valuation allowance at end of period | $ | 56 | $ | 46 | $ | 177 |
(in millions) | Pension and Other Benefits Liabilities(2) | Derivative Contracts(3) | Investments | Total | ||||||||
Balance at January 1, 2013 | $ | (8,307 | ) | $ | (263 | ) | $ | (7 | ) | $ | (8,577 | ) |
Changes in value (net of tax effect of $0) | 2,760 | 296 | (19 | ) | 3,037 | |||||||
Reclassification into earnings (net of tax effect of $321)(1) | 224 | 186 | — | 410 | ||||||||
Balance at December 31, 2013 | (5,323 | ) | 219 | (26 | ) | (5,130 | ) | |||||
Changes in value (net of tax effect of $1,276) | (2,267 | ) | 83 | 10 | (2,174 | ) | ||||||
Reclassification into earnings (net of tax effect of $4)(1) | 73 | (80 | ) | — | (7 | ) | ||||||
Balance at December 31, 2014 | (7,517 | ) | 222 | (16 | ) | (7,311 | ) | |||||
Changes in value (net of tax effect of $41) | 10 | 43 | (45 | ) | 8 | |||||||
Reclassification into earnings (net of tax effect of $16)(1) | 153 | (125 | ) | — | 28 | |||||||
Balance at December 31, 2015 | $ | (7,354 | ) | $ | 140 | $ | (61 | ) | $ | (7,275 | ) |
(1) | Amounts reclassified from AOCI for pension and other benefits are recorded in salaries and related costs in the Consolidated Statements of Operations. Amounts reclassified from AOCI for derivative contracts designated as foreign currency cash flow hedges and interest rate cash flow hedges are recorded in passenger revenue and interest expense, net, respectively, in the Consolidated Statements of Operations. |
(2) | Includes $1.9 billion of deferred income tax expense, primarily related to pension obligations, that will not be recognized in net income until the pension obligations are fully extinguished. |
(3) | Included $321 million of deferred income tax expense that remained in AOCI until December 2013 when all amounts in AOCI that related to derivative contracts designated as fuel cash flow hedges were recognized in the Consolidated Statement of Operations. |
(in millions) | Airline | Refinery | Intersegment Sales/Other | Consolidated | ||||||||||
Year Ended December 31, 2015 | ||||||||||||||
Operating revenue: | $ | 40,398 | $ | 4,741 | $ | 40,704 | ||||||||
Sales to airline segment | $ | (990 | ) | (1) | ||||||||||
Exchanged products | (3,108 | ) | (2) | |||||||||||
Sales of refined products to third parties | (337 | ) | (3) | |||||||||||
Operating income(4) | 7,512 | 290 | 7,802 | |||||||||||
Interest expense, net | 481 | — | 481 | |||||||||||
Depreciation and amortization | 1,805 | 30 | 1,835 | |||||||||||
Total assets, end of period | 51,785 | 1,349 | 53,134 | |||||||||||
Capital expenditures | 2,853 | 92 | 2,945 | |||||||||||
Year Ended December 31, 2014 | ||||||||||||||
Operating revenue: | $ | 40,217 | $ | 6,959 | $ | 40,362 | ||||||||
Sales to airline segment | $ | (1,313 | ) | (1) | ||||||||||
Exchanged products | (5,104 | ) | (2) | |||||||||||
Sales of refined products to third parties | (397 | ) | (3) | |||||||||||
Operating income(4) | 2,110 | 96 | 2,206 | |||||||||||
Interest expense, net | 650 | — | 650 | |||||||||||
Depreciation and amortization | 1,745 | 26 | 1,771 | |||||||||||
Total assets, end of period | 52,896 | 1,109 | 54,005 | |||||||||||
Capital expenditures | 2,184 | 65 | 2,249 | |||||||||||
Year Ended December 31, 2013 | ||||||||||||||
Operating revenue: | $ | 37,773 | $ | 7,003 | $ | 37,773 | ||||||||
Sales to airline segment | $ | (1,156 | ) | (1) | ||||||||||
Exchanged products | (5,352 | ) | (2) | |||||||||||
Sales of refined products to third parties | (495 | ) | (3) | |||||||||||
Operating income (loss)(4) | 3,516 | (116 | ) | 3,400 | ||||||||||
Interest expense, net | 852 | — | 852 | |||||||||||
Depreciation and amortization | 1,641 | 17 | 1,658 | |||||||||||
Total assets, end of period | 50,932 | 1,172 | 52,104 | |||||||||||
Capital expenditures | 2,516 | 52 | 2,568 |
(1) | Represents transfers, valued on a market price basis, from the refinery to the airline segment for use in airline operations. We determine market price by reference to the market index for the primary delivery location, which is New York Harbor, for jet fuel from the refinery. |
(2) | Represents value of products delivered under our exchange agreements, as discussed above, determined on a market price basis. |
(3) | Represents sales of refined products to third parties. These sales were at or near cost; accordingly, the margin on these sales is de minimis. |
(4) | Includes the impact of pricing arrangements between the airline and refinery segments with respect to the refinery's inventory price risk. |
Year Ended December 31, | |||||||||
(in millions) | 2015 | 2014 | 2013 | ||||||
Domestic | $ | 27,884 | $ | 26,898 | $ | 24,857 | |||
Atlantic | 6,505 | 6,757 | 6,446 | ||||||
Pacific | 3,503 | 3,948 | 4,086 | ||||||
Latin America | 2,812 | 2,759 | 2,384 | ||||||
Total | $ | 40,704 | $ | 40,362 | $ | 37,773 |
Year Ended December 31, | |||||||||
(in millions) | 2015 | 2014 | 2013 | ||||||
Fleet and other | $ | 35 | $ | 758 | $ | 402 | |||
Severance and related costs | — | 71 | — | ||||||
Settlements | — | (113 | ) | — | |||||
Total restructuring and other | $ | 35 | $ | 716 | $ | 402 |
Severance and Related Costs | Lease Restructuring | ||||||||||||||||||
(in millions) | 2015 | 2014 | 2013 | 2015 | 2014 | 2013 | |||||||||||||
Liability at beginning of period | $ | 42 | $ | — | $ | 49 | $ | 462 | $ | 168 | $ | 77 | |||||||
Additional costs and expenses | 51 | 71 | — | 41 | 349 | 114 | |||||||||||||
Payments | (41 | ) | (29 | ) | (46 | ) | (86 | ) | (55 | ) | (18 | ) | |||||||
Other | — | — | (3 | ) | (2 | ) | — | (5 | ) | ||||||||||
Liability at end of period | $ | 52 | $ | 42 | $ | — | $ | 415 | $ | 462 | $ | 168 |
Year Ended December 31, | |||||||||
(in millions, except per share data) | 2015 | 2014 | 2013 | ||||||
Net income | $ | 4,526 | $ | 659 | $ | 10,540 | |||
Basic weighted average shares outstanding | 797 | 836 | 849 | ||||||
Dilutive effect of share-based awards | 7 | 9 | 9 | ||||||
Diluted weighted average shares outstanding | 804 | 845 | 858 | ||||||
Basic earnings per share | $ | 5.68 | $ | 0.79 | $ | 12.41 | |||
Diluted earnings per share | $ | 5.63 | $ | 0.78 | $ | 12.29 |
Three Months Ended, | ||||||||||||
(in millions, except per share data) | March 31 | June 30 | September 30 | December 31 | ||||||||
2015 | ||||||||||||
Operating revenue | $ | 9,388 | $ | 10,707 | $ | 11,107 | $ | 9,502 | ||||
Operating income | 1,398 | 2,474 | 2,213 | 1,717 | ||||||||
Net income | 746 | 1,485 | 1,315 | 980 | ||||||||
Basic earnings per share | $ | 0.91 | $ | 1.85 | $ | 1.67 | $ | 1.26 | ||||
Diluted earnings per share | $ | 0.90 | $ | 1.83 | $ | 1.65 | $ | 1.25 | ||||
2014 | ||||||||||||
Operating revenue | $ | 8,916 | $ | 10,621 | $ | 11,178 | $ | 9,647 | ||||
Operating income (loss) | 620 | 1,579 | 835 | (828 | ) | |||||||
Net income (loss) | 213 | 801 | 357 | (712 | ) | |||||||
Basic earnings (loss) per share | $ | 0.25 | $ | 0.95 | $ | 0.43 | $ | (0.86 | ) | |||
Diluted earnings (loss) per share | $ | 0.25 | $ | 0.94 | $ | 0.42 | $ | (0.86 | ) |
Three Months Ended, | ||||||||||||
(in millions) | March 31 | June 30 | September 30 | December 31 | ||||||||
2015 | ||||||||||||
MTM adjustments and settlements | $ | 589 | $ | 720 | $ | (99 | ) | $ | 91 | |||
Restructuring and other | (10 | ) | (25 | ) | — | — | ||||||
Virgin Atlantic MTM adjustments | 13 | 31 | (13 | ) | (5 | ) | ||||||
Total income (loss) | $ | 592 | $ | 726 | $ | (112 | ) | $ | 86 | |||
2014 | ||||||||||||
MTM adjustments and settlements | $ | (34 | ) | $ | 1 | $ | (347 | ) | $ | (1,966 | ) | |
Restructuring and other | (49 | ) | (30 | ) | (570 | ) | (67 | ) | ||||
Loss on extinguishment of debt | (18 | ) | (111 | ) | (134 | ) | (5 | ) | ||||
Virgin Atlantic MTM adjustments | (8 | ) | — | (7 | ) | (119 | ) | |||||
Total loss | $ | (109 | ) | $ | (140 | ) | $ | (1,058 | ) | $ | (2,157 | ) |
Atlanta, Georgia | /s/ Ernst & Young LLP |
February 5, 2016 |
Plan Category | (a) No. of Securities to be Issued Upon Exercise of Outstanding Options, Warrants and Rights(1) | (b) Weighted-Average Exercise Price of Outstanding Options, Warrants and Rights(2) | (c) No. of Securities Remaining Available for Future Issuance Under Equity Compensation Plans (Excluding Securities Reflected in Column (a))(3) | ||||
Equity compensation plans approved by securities holders | 6,559,843 | $ | 12.09 | 26,839,417 | |||
Equity compensation plans not approved by securities holders | — | — | — | ||||
Total | 6,559,843 | $ | 12.09 | 26,839,417 |
(1) | Includes a maximum of 1,293,023 shares of common stock that may be issued upon the achievement of certain performance conditions under outstanding performance share awards as of December 31, 2015. |
(2) | Includes performance share awards, which do not have exercise prices. The weighted average exercise price of options is $15.05. |
(3) | Reflects shares remaining available for issuance under Delta's 2007 Performance Compensation Plan. If any shares of our common stock are covered by an award under the 2007 Plan that is canceled, forfeited or otherwise terminates without delivery of shares (including shares surrendered or withheld for payment of the exercise price of an award or taxes related to an award), then such shares will again be available for issuance under the 2007 Plan except for (i) any shares tendered in payment of an option, (ii) shares withheld to satisfy any tax withholding obligation with respect to the exercise of an option or stock appreciation right ("SAR"), or (iii) shares covered by a stock-settled SAR or other awards that were not issued upon the settlement of the award. Because 2,489,492 shares of restricted stock remain unvested and subject to forfeiture, these shares could again be available for issuance. |
DELTA AIR LINES, INC. | |||
By: | /s/ Richard H. Anderson | ||
Richard H. Anderson | |||
Chief Executive Officer |
Signature | Title | |
/s/ Richard H. Anderson | Chief Executive Officer and Director (Principal Executive Officer) | |
Richard H. Anderson | ||
/s/ Paul A. Jacobson | Executive Vice President and Chief Financial Officer (Principal Financial Officer) | |
Paul A. Jacobson | ||
/s/ Craig M. Meynard | Vice President and Chief Accounting Officer (Principal Accounting Officer) | |
Craig M. Meynard | ||
/s/ Edward H. Bastian | President and Director | |
Edward H. Bastian | ||
/s/ Francis S. Blake | Director | |
Francis S. Blake | ||
/s/ Roy J. Bostock | Director | |
Roy J. Bostock | ||
/s/ John S. Brinzo | Director | |
John S. Brinzo | ||
/s/ Daniel A. Carp | Chairman of the Board | |
Daniel A. Carp | ||
/s/ David G. DeWalt | Director | |
David G. DeWalt | ||
/s/ Thomas E. Donilon | Director | |
Thomas E. Donilon | ||
/s/ William H. Easter III | Director | |
William H. Easter III | ||
/s/ Mickey P. Foret | Director | |
Mickey P. Foret | ||
/s/ Shirley C. Franklin | Director | |
Shirley C. Franklin | ||
/s/ David R. Goode | Director | |
David R. Goode | ||
/s/ George N. Mattson | Director | |
George N. Mattson | ||
/s/ Douglas R. Ralph | Director | |
Douglas R. Ralph | ||
/s/ Sergio A.L. Rial | Director | |
Sergio A.L. Rial | ||
/s/ Kathy N. Waller | Director | |
Kathy N. Waller | ||
/s/ Kenneth B. Woodrow | Director | |
Kenneth B. Woodrow |
3.1(a) | Delta's Amended and Restated Certificate of Incorporation (Filed as Exhibit 3.1 to Delta's Current Report on Form 8-K as filed on April 30, 2007).* |
3.1 (b) | Amendment to Amended and Restated Certificate of Incorporation (Filed as Exhibit 3.1 to Delta's Current Report on Form 8-K as filed on June 27, 2014).* |
3.2 | Delta's By-Laws (Filed as Exhibit 3.1 to Delta's Current Report on Form 8-K as filed on June 27, 2014).* |
10.1 | Credit and Guaranty Agreement, dated as of August 24, 2015, among Delta Air Lines, Inc., as Borrower, the subsidiaries of the Borrower named as Guarantors, each of the several Lenders from time to time party thereto, JPMorgan Chase Bank, N.A., as administrative agent for the Lenders, Barclays Bank PLC, Bank of America, N.A., Wells Fargo Bank, N.A. and U.S. Bank National Association, as Co-Syndication Agents, BBVA Compass and Fifth Third Bank, as Co-Documentation Agents, J.P. Morgan Securities LLC, Barclays Bank PLC, Merrill Lynch, Pierce, Fenner & Smith Incorporated, BNP Paribas Securities Corp., Citigroup Global Markets Inc., BBVA Compass, Credit Agricole Corporate and Investment Bank, Credit Suisse AG, Cayman Islands Branch, Deutsche Bank Securities Inc., Fifth Third Bank, Goldman Sachs Lending Partners LLC, Morgan Stanley Senior Funding, Inc., Wells Fargo Securities, LLC, Natixis, New York Branch, U.S. Bank National Association and UBS Securities LLC, as Revolving Facility Joint Lead Arrangers and Revolving Facility Joint Bookrunners and Barclays Bank PLC, J.P. Morgan Securities LLC, Merrill Lynch, Pierce, Fenner & Smith Incorporated, BNP Paribas Securities Corp., Citigroup Global Markets Inc., BBVA Compass, Credit Agricole Corporate and Investment Bank, Credit Suisse AG, Cayman Islands Branch, Deutsche Bank Securities Inc., Fifth Third Bank, Goldman Sachs Lending Partners LLC, Wells Fargo Securities, LLC and U.S. Bank National Association, as Term Loan Joint Lead Arrangers and Term Loan Joint Bookrunners (Filed as Exhibit 10.1 to Delta's Quarterly Report on Form 10-Q for the quarter ended September 30, 2015).* |
10.2 | Credit and Guaranty Agreement, dated as of October 18, 2012, among Delta Air Lines, Inc., as Borrower, the subsidiaries of the Borrower named as Guarantors, each of the several Lenders party thereto, Barclays Bank PLC, as administrative agent, Wilmington Trust, National Association, as Collateral Trustee, Deutsche Bank Securities Inc. and UBS Securities LLC, as Co-Syndication Agents, Merrill Lynch, Pierce, Fenner & Smith Incorporated and Citigroup Global Markets Inc., as co-documentation agents, Barclays Bank PLC, Merrill Lynch, Pierce, Fenner & Smith Incorporated, Citigroup Global Markets Inc., Deutsche Bank Securities Inc., and UBS Securities LLC, as joint lead arrangers, and Barclays Bank PLC, BNP Paribas Securities Corp, Merrill Lynch, Pierce, Fenner & Smith Incorporated, Citigroup Global Markets Inc., Credit Suisse Securities (USA) LLC, Deutsche Bank Securities Inc., Goldman Sachs Bank USA, J.P. Morgan Securities LLC, Morgan Stanley Senior Funding, Inc. and UBS Securities LLC, as joint bookrunners (Filed as Exhibit 10.2 to Delta's Annual Report on Form 10-K for the year ended December 31, 2012).* |
10.3 | Transaction Framework Agreement among Delta, Delta Master Executive Council, Northwest Master Executive Council and Air Line Pilots Association, International dated as of June 26, 2008 (Filed as Exhibit 10 to Delta's Quarterly Report on Form 10-Q for the quarter ended June 30, 2008).* |
10.4 | Letter Agreement, dated April 14, 2008, by and among Delta Air Lines, Inc., the Master Executive Council of Delta, and Air Line Pilots Association, International dated April 14, 2008 (Filed as Exhibit 10.2 to Delta's Quarterly Report on Form 10-Q for the quarter ended March 31, 2008).* |
10.5 | Anchor Tenant Agreement dated as of December 9, 2010 between JFK International Air Terminal LLC and Delta Air Lines, Inc. (Filed as Exhibit 10.4 to Delta's Annual Report on Form 10-K for the year ended December 31, 2010).* |
10.6(a) | Supplemental Agreement No. 13 to Purchase Agreement Number 2022, dated August 24, 2011, between The Boeing Company and Delta relating to Boeing Model 737NG Aircraft (“Supplemental Agreement 13”) (Filed as Exhibit 10.1 to Delta's Quarterly Report on Form 10-Q for the quarter ended September 30, 2011).*/** |
10.6(b) | Supplemental Agreement No. 17 to Purchase Agreement Number 2022, dated December 16, 2015, between The Boeing Company and Delta relating to Boeing Model 737NG Aircraft ("Supplemental Agreement 17").** |
10.7(a) | Letter Agreements, dated August 24, 2011, relating to Supplemental Agreement 13 (Filed as Exhibit 10.2 to Delta's Quarterly Report on Form 10-Q for the quarter ended September 30, 2011).*/** |
10.7(b) | Letter Agreements, dated December 16, 2015, relating to Supplemental Agreement 17.** |
10.8(a) | Aircraft General Terms Agreement, dated October 21, 1997, between Boeing and Delta (Filed as Exhibit 10.6 to Delta's Quarterly Report on Form 10-Q for the quarter ended December 31, 1997).*/** |
10.8(b) | Letter Agreement, dated August 24, 2011, relating to Revisions to Aircraft General Terms Agreement dated October 21, 1997 and Supplemental Agreement 13 (Filed as Exhibit 10.3(b) to Delta's Quarterly Report on Form 10-Q for the quarter ended September 30, 2011).*/** |
10.8(c) | Letter Agreement, dated December 16, 2015, relating to Revisions to Aircraft General Terms Agreement dated October 21, 1997 and Supplemental Agreement 17.** |
10.9 | Airbus A330-900neo Aircraft and A350-900 Aircraft Purchase Agreement dated as of November 24, 2014 between Airbus S.A.S and Delta Air Lines, Inc. (Filed as Exhibit 10.9 to Delta's Annual Report on Form 10-K for the year ended December 31, 2014).*/** |
10.10(a) | Delta Air Lines, Inc. 2007 Performance Compensation Plan (Filed as Exhibit 10.1 to Delta's Current Report on Form 8-K filed on March 22, 2007).* |
10.10(b) | First Amendment to the Delta Air Lines, Inc. 2007 Performance Compensation Plan (Filed as Exhibit 10.12(b) to Delta's Annual Report on Form 10-K for the year ended December 31, 2008).* |
10.10(c) | Second Amendment to the Delta Air Lines, Inc. 2007 Performance Compensation Plan (Filed as Exhibit 10.1 to Delta's Quarterly Report on Form 10-Q for the quarter ended March 31, 2015).* |
10.10(d) | Form of Delta 2007 Performance Compensation Plan Award Agreement for Officers (Filed as Exhibit 10.1 to Delta's Current Report on Form 8-K filed on April 30, 2007).* |
10.11(a) | Delta Air Lines, Inc. Officer and Director Severance Plan, as amended and restated as of January 2, 2009, as further amended October 20, 2009 (Filed as Exhibit 10.11(a) to Delta's Annual Report on Form 10-K for the year ended December 31, 2009).* |
10.11(b) | Amendment to the Delta Air Lines, Inc. Officer and Director Severance Plan, as amended and restated as of January 2, 2009, as further amended October 20, 2009 (Filed as Exhibit 10.11(b) to Delta's Annual Report on Form 10-K for the year ended December 31, 2009).* |
10.11(c) | Amendment to the Delta Air Lines, Inc. Officer and Director Severance Plan, dated as of February 10, 2010 (Filed as Exhibit 10.3(a) to Delta's Quarterly Report on Form 10-Q for the quarter ended September 30, 2015).* |
10.12 | Description of Certain Benefits of Members of the Board of Directors and Executive Officers (Filed as Exhibit 10.2 to Delta's Quarterly Report on Form 10-Q for the quarter ended September 30, 2015).* |
10.13(a) | Delta Air Lines, Inc. 2013 Long Term Incentive Program (Filed as Exhibit 10.14 to Delta's Annual Report on Form 10-K for the year ended December 31, 2012).* |
10.13(b) | Model Award Agreement for the Delta Air Lines, Inc. 2013 Long Term Incentive Program (Filed as Exhibit 10.1 to Delta's Quarterly Report on Form 10-Q for the quarter ended March 31, 2013).* |
10.15(a) | Delta Air Lines, Inc. 2015 Long Term Incentive Program (Filed as Exhibit 10.16 to Delta's Annual Report on Form 10-K for the year ended December 31, 2014).* |
10.15(b) | Model Award Agreement for the Delta Air Lines, Inc. 2015 Long Term Incentive Program (Filed as Exhibit 10.1 to Delta's Quarterly Report on Form 10-Q for the quarter ended March 31, 2015).* |
10.16 | Delta Air Lines, Inc. 2016 Long Term Incentive Program. |
10.17 | Delta Air Lines, Inc. 2015 Management Incentive Plan (Filed as Exhibit 10.18 to Delta's Annual Report on Form 10-K for the year ended December 31, 2014).* |
10.18 | Delta Air Lines, Inc. 2016 Management Incentive Plan. |
10.19(a) | Delta Air Lines, Inc. Transition Award Program (Filed as Exhibit 10.17 to Delta's Annual Report on Form 10-K for the year ended December 31, 2012).* |
10.19(b) | Model Award Agreement for the Delta Air Lines, Inc. Transition Award Program (Filed as Exhibit 10.2 to Delta's Quarterly Report on Form 10-Q for the quarter ended March 31, 2013).* |
10.20 | Letter Agreement dated as of June 11, 2008 between counsel for and on behalf of Mickey P. Foret and Aviation Consultants, LLC, and counsel for and on behalf of Northwest Airlines, Inc. (Filed as Exhibit 10.22 to Delta's Annual Report on Form 10-K for the year ended December 31, 2008).* |
10.21(a) | Northwest Airlines, Inc. Excess Pension Plan for Salaried Employees (2001 Restatement) (Filed as Exhibit 10.28 to Northwest's Annual Report on Form 10-K for the year ended December 31, 2006).* |
10.21(b) | First Amendment of Northwest Airlines Excess Pension Plan for Salaried Employees (2001 Restatement) (Filed as Exhibit 10.3 to Northwest's Quarterly Report on Form 10-Q for the quarter ended September 30, 2005).* |
10.21(c) | Third Amendment of Northwest Airlines Excess Pension Plan for Salaried Employees (2001 Restatement) (Filed as Exhibit 10.1 to Northwest's Quarterly Report on Form 10-Q for the quarter ended March 31, 2008).* |
10.22 | Delta Air Lines, Inc. Restoration Long Term Disability Plan (Filed as Exhibit 10.24 to Delta's Annual Report on Form 10-K for the year ended December 31, 2011).* |
10.23 | Letter Agreement, dated February 2, 2012 between Delta Air Lines, Inc. and Richard H. Anderson (Filed as Exhibit 10.25 to Delta's Annual Report on Form 10-K for the year ended December 31, 2011).* |
10.24 | Letter Agreement, dated February 2, 2012 between Delta Air Lines, Inc. and Richard B. Hirst (Filed as Exhibit 10.26 to Delta's Annual Report on Form 10-K for the year ended December 31, 2011).* |
10.25 | Terms of 2014 Restricted Stock Awards for Non-Employee Directors (Filed as Exhibit 10.1 to Delta’s Quarterly Report on Form 10-Q for the quarter ended June 30, 2014).* |
10.26 | Terms of 2015 Restricted Stock Awards for Non-Employee Directors (Filed as Exhibit 10.1 to Delta’s Quarterly Report on Form 10-Q for the quarter ended June 30, 2015).* |
12.1 | Statement regarding computation of ratio of earnings to fixed charges for each fiscal year in the five-year period ended December 31, 2015. |
21.1 | Subsidiaries of the Registrant. |
23.1 | Consent of Ernst & Young LLP. |
31.1 | Rule 13a-14(a)/15d-14(a) Certification of Chief Executive Officer. |
31.2 | Rule 13a-14(a)/15d-14(a) Certification of Chief Financial Officer. |
32 | Certification pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act 2002. |
101.INS | XBRL Instance Document |
101.SCH | XBRL Taxonomy Extension Schema Document |
101.CAL | XBRL Taxonomy Extension Calculation Linkbase Document |
101.DEF | XBRL Taxonomy Extension Definition Linkbase Document |
101.LAB | XBRL Taxonomy Extension Labels Linkbase Document |
101.PRE | XBRL Taxonomy Extension Presentation Linkbase Document |
* | Incorporated by reference. |
** | Portions of this exhibit have been omitted and filed separately with the Securities and Exchange Commission pursuant to requests for confidential treatment. |
1. | The Table of Contents of the Purchase Agreement is deleted and replaced by the attached Table of Contents, which reflects the amendments made to the Purchase Agreement by this Supplemental Agreement and is identified with a “SA-17” legend to reflect the changes made by this Supplemental Agreement. |
2. | Tables 1Q1R2, 1Q2R2 and 1Q3R2 entitled Aircraft Delivery, Description, Price and Advance Payments are deleted and replaced by the attached Tables 1Q1R3, 1Q2R3, 1Q3R3 (collectively, Table 1Q) which incorporate the twenty (20) Incremental Aircraft. |
3. | Exhibit A6 pertaining to the Aircraft configuration is added to describe the configuration of the Incremental Aircraft. |
4. | As a matter of record, Letter Agreement 6-1162-RLL-2234R8 entitled “Special Matters” was revised and superseded by Letter Agreement 6-1162-RLL-2234R9 independently of a Purchase Agreement Supplemental Agreement. Letter Agreement 6-1162-RLL-2234R9 is superseded and replaced by the attached Letter Agreement 6-1162-RLL-2234R10 [***]. |
5. | Letter Agreement DAL-PA-02022-LA-1104472 entitled “Revisions to Aircraft General Terms Agreement AGTA-DAL dated October 21, 1997 (AGTA) Terms” is revised and superseded by Letter Agreement DAL-PA-2022-LA-1104472R1 to reflect the incorporation of the twenty (20) 737-932ER Incremental Aircraft. |
6. | Letter Agreement DAL-PA-02022-LA-1104482 entitled [***] is revised and superseded by Letter Agreement DAL-PA-2022-LA-1104482R1 to reflect the incorporation of the twenty (20) Incremental Aircraft. |
7. | Letter Agreement DAL-PA-02022-LA-1105848 entitled [***] is revised and superseded by Letter Agreement DAL-PA-2022-LA-1105848R1 to reflect the incorporation of the twenty (20) Incremental Aircraft. |
8. | Letter Agreement DAL-PA-02022-LA-1104487 entitled [***] is revised and superseded by Letter Agreement DAL-PA-2022-LA-1104487R1 to reflect the incorporation of the twenty (20) Incremental Aircraft. |
9. | Letter Agreement DAL-PA-02022-LA-1105858 entitled “Option Aircraft” is revised and superseded by Letter Agreement DAL-PA-2022-LA-1105858R1 to reflect the cancellation of all remaining model 737 options. |
10. | Letter Agreement DAL-PA-02022-LA-1105843R2 entitled [***] is revised and superseded by Letter Agreement DAL-PA-2022-LA-1105843R3 to reflect the incorporation of the twenty (20) Incremental Aircraft. |
11. | Letter Agreement DAL-PA-2022-LA-1105850R1 entitled [***] is revised and superseded by Letter Agreement DAL-PA-2022-LA-1105850R2 to reflect the incorporation of the twenty (20) Incremental Aircraft. |
12. | Letter Agreement DAL-PA-02022-LA-1501328 entitled “Put Option Aircraft” is added to reflect Customer’s agreement to purchase, at Boeing’s option, up to ten (10) Put Option Aircraft on terms and conditions set forth in such Letter Agreement. |
DELTA AIR LINES, INC. By /s/ Gregory A. May_________ Gregory A. May Its SVP – Supply Chain Management | THE BOEING COMPANY By /s/ Will Witherspoon_______ Will Witherspoon Its Attorney in Fact ___________ |
TABLE OF CONTENTS | ||
ARTICLES | SA NUMBER | |
1. | Quantity, Model and Description | |
2. | Delivery Schedule | |
3. | Price | |
4. | Payment | |
5. | Miscellaneous | |
TABLE | ||
1Q. | Aircraft Delivery, Description, Price and Advance Payments | SA‑17 |
2A. | Option Aircraft Information Table (intentionally deleted) | SA‑13, Article 3 |
EXHIBITS | ||
A. | Aircraft Configuration for 737‑832 Aircraft | SA‑8 |
A2. | Aircraft Configuration for 737‑732 Aircraft | SA‑9 |
A3. | Aircraft Configuration for 737‑732 Aircraft | SA‑9 |
A4. | Revised Aircraft Configuration for 737‑832 Aircraft | SA‑12 |
A5R1. | Aircraft Configuration for 737‑932ER Aircraft | SA‑14 |
A6 | Aircraft Configuration for 737-932ER Incremental Aircraft | SA-17 |
D2. | Escalation Adjustment | SA‑8 |
SUPPLEMENTAL EXHIBITS | ||
BFE. | Buyer Furnished Equipment Variables | SA‑8 |
BFE1. | Buyer Furnished Equipment Variables | SA‑8 |
BFE2. | Buyer Furnished Equipment Variables for 737NG | SA‑14 |
CS1. | Customer Support Variables | |
CS2. | Customer Support Variables for 737‑700 Aircraft | SA‑8 |
CS3 | Customer Support Variables for 737‑900ER Aircraft | SA‑13 |
EE1. | Engine Escalation | |
[***] | [***] | [***] |
SLP1. | Service Life Policy Components | |
TABLE OF CONTENTS, continued | ||
LETTER AGREEMENTS | SA NUMBER | |
6‑1162‑RLL‑2147 | Airframe Maintenance Cost Protection Program | |
6‑1162‑RLL‑2191 | Multiple Aircraft Operating Weights | |
6‑1162‑RLL‑2198 | Delivery Price Adjustment | |
6‑1162‑RLL‑2233 | Aircraft Performance Guarantees for 737‑632, 732 and 832 Aircraft | |
6‑1162‑RLL‑2234R10 | Special Matters | SA‑17 |
[***] | [***] | |
6‑1162‑RLL‑2241 | Promotion Support | SA‑13, Article 7 |
6‑1162‑RLL‑2242 | 1997 and 1998 Escalation Sharing | |
[***] | [***] | |
6‑1162‑RLL‑2244 | Performance Retention Commitment | |
6‑1162‑RLL‑2245 | Certain Contractual Matters (intentionally deleted) | SA‑13 |
6‑1162‑RLL‑2247 | [***] | SA‑13, Article 7 |
6‑1162‑RLL‑3709 | [***] | SA‑13, Article 7 |
6‑1162‑RLL‑2251 | Total Cost Team | |
6‑1162‑RLL‑2400 | Open Configuration Matters | |
6‑1162‑RLL‑2424R1 | Engine Matters | |
6‑1162‑KSW‑6090 | Performance Guarantees 737‑732 Aircraft | |
[***] | [***] | [***] |
[***] | [***] | [***] |
6‑1162‑KSW‑6238 | Aircraft Performance Guarantees for 737‑732 Aircraft | SA‑9 |
6‑1162‑MMO‑0480 | Aircraft Performance Guarantees for 737‑832 Aircraft | SA‑11 |
DAL‑PA‑02022‑LA‑1104472R1 | Revision to AGTA‑DAL Terms | SA‑17 |
TABLE OF CONTENTS, continued | ||
LETTER AGREEMENTS | SA NUMBER | |
[***] | [***] | [***] |
DAL‑PA‑2022‑LA-1104482R1 | [***] for 737‑932ER Aircraft | SA‑17 |
DAL‑PA‑2022‑LA‑1104483 | [***] Guarantee | SA-13 |
DAL‑PA‑2022‑LA‑1104484 | Open Configuration Matters for 737‑932ER Aircraft | SA-13 |
DAL‑PA‑02022‑LA‑1104485 | [***] Guarantees for 737‑932ER Aircraft | SA-13 |
DAL-PA-2022-LA-1105848R1 | Agreement for [***] | SA-17 |
DAL‑PA‑2022‑LA‑1104487R1 | [***] | SA-17 |
DAL-PA-2022-LA-1105850R2 | [***] | SA-17 |
DAL-PA-2022-LA-1105858R1 | Option Aircraft | SA-17 |
DAL-PA-2022-LA-1105843R3 | [***] | SA-17 |
DAL-PA-2022-LA-1105849R1 | [***] | SA-14 |
DAL-PA-2022-LA-1104480 | [***] | SA-13 |
DAL-PA-2022-LA-09503 | Promotional Support | SA-14 |
DAL-PA-2022-LA-1303832 | [***] | SA-15 |
DAL-PA-2022-LA-1501328 | Put Option Aircraft | SA-17 |
Airframe Model/MTOW: | 737-900ER | [***] | [***] | [***] | |||||||
Engine Model/Thrust: | CFM56-7B27/B1F | [***] | Detail Specification: | [***] | [***] | ||||||
[***] | [***] | Airframe Price Base Year/Escalation Formula: | [***] | [***] | |||||||
Airframe Price: | [***] | [***] | Airframe Price Escalation Forecast: | [***] | [***] | ||||||
Optional Features: | [***] | [***] | Engine Price Base Year/Escalation Formula: | [***] | [***] | ||||||
Sub-Total of Airframe and Features: | [***] | [***] | |||||||||
Engine Price (Per Aircraft): | [***] | [***] | |||||||||
Aircraft Basic Price (Excluding BFE/SPE): | [***] | [***] | Airframe Escalation Data: | ||||||||
Buyer Furnished Equipment (BFE) Estimate: | [***] | [***] | Base Year Index (ECI): | [***] | |||||||
Seller Purchased Equipment (SPE) Estimate: | [***] | [***] | Base Year Index (CPI): | [***] | |||||||
[***] | [***] | ||||||||||
Escalation Estimate | [***] (Amts. Due/Mos. Prior to Delivery): | ||||||||||
Delivery | Number of | Escalation Factor | Adv Payment Base | [***] | [***] | [***] | [***] | [***] | [***] | ||
Date | Aircraft | (Airframe) | Price Per A/P | [***] | [***] | [***] | [***] | [***] | |||
[***] | [***] | [***] | [***] | [***] | [***] | [***] | [***] | [***] | [***] | ||
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[***] | [***] | [***] | [***] | [***] | [***] | [***] | [***] | [***] | [***] |
Escalation Estimate | [***] (Amts. Due/Mos. Prior to Delivery): | ||||||||||
Delivery | Number of | Escalation Factor | Adv Payment Base | [***] | [***] | [***] | [***] | [***] | [***] | ||
Date | Aircraft | (Airframe) | Price Per A/P | [***] | [***] | [***] | [***] | [***] | |||
[***] | [***] | [***] | [***] | [***] | [***] | [***] | [***] | [***] | [***] | ||
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[***] |
Airframe Model/MTOW: | 737-900ER | [***] | [***] | [***] | |||||||
Engine Model/Thrust: | CFM56-7B27/B1F | [***] | Detail Specification: | [***] | [***] | ||||||
[***] | [***] | Airframe Price Base Year/Escalation Formula: | [***] | [***] | |||||||
Airframe Price: | [***] | [***] | Airframe Price Escalation Forecast: | [***] | [***] | ||||||
Optional Features: | [***] | [***] | Engine Price Base Year/Escalation Formula: | [***] | [***] | ||||||
Sub-Total of Airframe and Features: | [***] | [***] | |||||||||
Engine Price (Per Aircraft): | [***] | [***] | |||||||||
Aircraft Basic Price (Excluding BFE/SPE): | [***] | [***] | Airframe Escalation Data: | ||||||||
Buyer Furnished Equipment (BFE) Estimate: | [***] | [***] | Base Year Index (ECI): | [***] | |||||||
Seller Purchased Equipment (SPE) Estimate: | [***] | [***] | Base Year Index (CPI): | [***] | |||||||
[***] | [***] | ||||||||||
Escalation Estimate | [***] (Amts. Due/Mos. Prior to Delivery): | ||||||||||
Delivery | Number of | Escalation Factor | Adv Payment Base | [***] | [***] | [***] | [***] | [***] | [***] | ||
Date | Aircraft | (Airframe) | Price Per A/P | [***] | [***] | [***] | [***] | [***] | |||
[***] | [***] | [***] | [***] | [***] | [***] | [***] | [***] | [***] | [***] | ||
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[***] | [***] | [***] | [***] | [***] | [***] | [***] | [***] | [***] | [***] |
Escalation Estimate | [***] (Amts. Due/Mos. Prior to Delivery): | ||||||||||
Delivery | Number of | Escalation Factor | Adv Payment Base | [***] | [***] | [***] | [***] | [***] | [***] | ||
Date | Aircraft | (Airframe) | Price Per A/P | [***] | [***] | [***] | [***] | [***] | |||
[***] | [***] | [***] | [***] | [***] | [***] | [***] | [***] | [***] | [***] | ||
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[***] | |||||||||||
[***] | |||||||||||
[***] |
Airframe Model/MTOW: | 737-900ER | [***] | [***] | [***] | |||||||
Engine Model/Thrust: | CFM56-7B27/B1F | [***] | Detail Specification: | [***] | [***] | ||||||
[***] | [***] | Airframe Price Base Year/Escalation Formula: | [***] | [***] | |||||||
Airframe Price: | [***] | [***] | Airframe Price Escalation Forecast: | [***] | [***] | ||||||
Optional Features: | [***] | [***] | Engine Price Base Year/Escalation Formula: | [***] | [***] | ||||||
Sub-Total of Airframe and Features: | [***] | [***] | |||||||||
Engine Price (Per Aircraft): | [***] | [***] | |||||||||
Aircraft Basic Price (Excluding BFE/SPE): | [***] | [***] | Airframe Escalation Data: | ||||||||
Buyer Furnished Equipment (BFE) Estimate: | [***] | [***] | Base Year Index (ECI): | [***] | |||||||
Seller Purchased Equipment (SPE) Estimate: | [***] | [***] | Base Year Index (CPI): | [***] | |||||||
[***] | [***] | ||||||||||
Escalation Estimate | [***] (Amts. Due/Mos. Prior to Delivery): | ||||||||||
Delivery | Number of | Escalation Factor | Adv Payment Base | [***] | [***] | [***] | [***] | [***] | [***] | ||
Date | Aircraft | (Airframe) | Price Per A/P | [***] | [***] | [***] | [***] | [***] | |||
[***] | [***] | [***] | [***] | [***] | [***] | [***] | [***] | [***] | [***] | ||
[***] | [***] | [***] | [***] | [***] | [***] | [***] | [***] | [***] | [***] | ||
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[***] | [***] | [***] | [***] | [***] | [***] | [***] | [***] | [***] | [***] |
Escalation Estimate | [***] (Amts. Due/Mos. Prior to Delivery): | ||||||||||
Delivery | Number of | Escalation Factor | Adv Payment Base | [***] | [***] | [***] | [***] | [***] | [***] | ||
Date | Aircraft | (Airframe) | Price Per A/P | [***] | [***] | [***] | [***] | [***] | |||
[***] | [***] | [***] | [***] | [***] | [***] | [***] | [***] | [***] | [***] | ||
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[***] | [***] | [***] | [***] | [***] | [***] | [***] | [***] | [***] | [***] | [***] | |
[***] | [***] | [***] | [***] | [***] | [***] | [***] | [***] | [***] | [***] | ||
[***] | [***] | [***] | [***] | [***] | [***] | [***] | [***] | [***] | [***] | ||
[***] | [***] | [***] | [***] | [***] | [***] | [***] | [***] | [***] | [***] | ||
[***] | [***] | [***] | [***] | [***] | [***] | [***] | [***] | [***] | [***] | [***] | |
[***] | [***] | [***] | [***] | [***] | [***] | [***] | [***] | [***] | [***] | [***] | |
[***] | [***] | [***] | [***] | [***] | [***] | [***] | [***] | [***] | [***] | [***] | |
[***] | [***] | [***] | [***] | [***] | [***] | [***] | [***] | [***] | [***] | [***] | |
[***] | |||||||||||
[***] | |||||||||||
[***] | |||||||||||
[***] | ||
Reference: | Purchase Agreement Nos. 2022 and 2026 (the Purchase Agreement) between The Boeing Company (Boeing) and Delta Air Lines, Inc. (Customer) relating to 737‑632/‑732/‑832/‑932ER, 777‑232IGW and 777‑232LR aircraft (the Aircraft). |
Subject: | [***] |
Reference: | Purchase Agreement No. PA-02022 (Purchase Agreement) between The Boeing Company (Boeing) and Delta Air Lines, Inc. (Customer) relating to Model 737-900ER aircraft with Winglets (Aircraft) |
1. | [***] |
THE BOEING COMPANY | ||
By | /s/ Will Witherspoon | |
Will Witherspoon | ||
Its | Attorney-In-Fact | |
ACCEPTED AND AGREED TO this | ||
Date: | December 16, 2015 | |
Delta Air Lines, Inc. | ||
By | /s/ Gregory A. May | |
Its | SVP - Supply Chain Management |
Subject: | Agreement for [***] |
Reference: | Purchase Agreement No. PA-02022 (Purchase Agreement) between The Boeing Company (Boeing) and Delta Air Lines, Inc. (Customer) relating to Model 737-732/-832/-932 aircraft. |
1. | [***] |
2. | [***] |
THE BOEING COMPANY | ||
By | /s/Will Witherspoon | |
Will Witherspoon | ||
Its | Attorney-In-Fact | |
ACCEPTED AND AGREED TO this | ||
Date: | December 16, 2015 | |
DELTA AIR LINES, INC. | ||
By | /s/ Gregory A. May | |
Its | SVP - Supply Chain Management |
Subject: | [***] |
Reference: | Purchase Agreement No. PA-02022 (Purchase Agreement) between The Boeing Company (Boeing) and Delta Air Lines, Inc. (Customer) relating to Model 737-900ER aircraft (Aircraft) |
(i) | [***]; |
(ii) | [***] |
4. | [***] |
THE BOEING COMPANY | ||
By | /s/ Will Witherspoon | |
Will Witherspoon | ||
Its | Attorney-In-Fact | |
ACCEPTED AND AGREED TO this | ||
Date: | December 16, 2015 | |
DELTA AIR LINES, INC. | ||
By | /s/ Gregory A. May | |
Its | SVP - Supply Chain Mangement |
Subject: | Option Aircraft |
Reference: | Purchase Agreement No. PA-02022 (Purchase Agreement) between The Boeing Company (Boeing) and Delta Air Lines, Inc. (Customer) relating to Model 737-900ER aircraft (Aircraft) |
THE BOEING COMPANY | ||
By | /s/ Will Witherspoon | |
Will Witherspoon | ||
Its | Attorney-In-Fact | |
ACCEPTED AND AGREED TO this | ||
Date: | December 16, 2015 | |
Delta Air Lines, Inc. | ||
By | /s/ Gregory A. May | |
Its | SVP - Supply Chain Management |
Subject: | [***] |
Reference: | Purchase Agreement No. 2022 (Purchase Agreement) between The Boeing Company (Boeing) and Delta Air Lines, Inc. (Customer) relating to Model 737-732/-832/-932ER aircraft (Aircraft) |
1. | [***] |
3. | Assignment. |
4. | Confidential Treatment. |
THE BOEING COMPANY | ||
By | /s/ Will Witherspoon | |
Its | Attorney-In-Fact | |
ACCEPTED AND AGREED TO this | ||
Date: | December 16, 2015 | |
DELTA AIR LINES, INC. | ||
By | /s/ Gregory A. May | |
Its | SVP - Supply Chain Management |
Subject: | [***] |
Reference: | Purchase Agreement No. PA-02022 (Purchase Agreement) between The Boeing Company (Boeing) and Delta Air Lines, Inc. (Customer) relating to Model 737-900ER aircraft (Aircraft) |
THE BOEING COMPANY | ||
By | /s/ Will Witherspoon | |
Its | Attorney-In-Fact | |
ACCEPTED AND AGREED TO this | ||
Date: | December 16, 2015 | |
Delta Air Lines, Inc. | ||
By | /s/ Gregory A. May | |
Its | SVP - Supply Chain Management |
Subject: | Put Option Aircraft |
Reference: | Purchase Agreement No. PA-02022 (Purchase Agreement) between The Boeing Company (Boeing) and Delta Air Lines, Inc. (Customer) relating to Model 737-900ER aircraft (Aircraft) |
THE BOEING COMPANY | ||
By | /s/ Will Witherspoon | |
Its | Attorney-In-Fact | |
ACCEPTED AND AGREED TO this | ||
Date: | December 16, 2015 | |
DELTA AIR LINES, INC. | ||
By | /s/ Gregory A. May | |
Its | SVP - Supply Chain Management |
Airframe Model/MTOW: | 737-900ER | [***] | |||||||||
Engine Model/Thrust: | CFM56-7B27/B1F | [***] | Detail Specification: | [***] | |||||||
Airframe Price Base Year/Escalation Formula: | [***] | ||||||||||
Airframe Price: | [***] | Airframe Price Escalation Forecast: | [***] | ||||||||
Optional Features:** | [***] | Engine Price Base Year/Escalation Formula: | [***] | ||||||||
Sub-Total of Airframe and Features: | [***] | ||||||||||
Engine Price (Per Aircraft): | [***] | ||||||||||
Aircraft Basic Price (Excluding BFE/SPE): | [***] | Airframe Escalation Data: | |||||||||
Buyer Furnished Equipment (BFE) Estimate: | [***] | Base Year Index (ECI): | [***] | ||||||||
Seller Purchased Equipment (SPE) Estimate: | [***] | Base Year Index (CPI): | [***] | ||||||||
[***] | [***] | ||||||||||
Escalation Estimate | [***] (Amts. Due/Mos. Prior to Delivery): | ||||||||||
Delivery | Number of | Escalation Factor | Adv Payment Base | [***] | [***] | [***] | [***] | [***] | [***] | ||
Date | Aircraft | (Airframe) | Price Per A/P | [***] | [***] | [***] | [***] | [***] | |||
[***] | [***] | [***] | [***] | [***] | [***] | [***] | [***] | [***] | [***] | ||
[***] | [***] | [***] | [***] | [***] | [***] | [***] | [***] | [***] | [***] | ||
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[***] | [***] | [***] | [***] | [***] | [***] | [***] | [***] | [***] | [***] | ||
[***] | [***] | [***] | [***] | [***] | [***] | [***] | [***] | [***] | [***] | ||
[***] | [***] | [***] | [***] | [***] | [***] | [***] | [***] | [***] | [***] | ||
[***] | |||||||||||
[***] | |||||||||||
[***] | |||||||||||
[***] |
Airframe Model/MTOW: | 737-900ER | [***] | [***] | ||||||||
Engine Model/Thrust: | CFM56-7B27/B1F | [***] | Detail Specification: | [***] | |||||||
Airframe Price Base Year/Escalation Formula: | [***] | ||||||||||
Airframe Price: | [***] | Airframe Price Escalation Forecast: | [***] | ||||||||
Optional Features:** | [***] | Engine Price Base Year/Escalation Formula: | [***] | ||||||||
Sub-Total of Airframe and Features: | [***] | ||||||||||
Engine Price (Per Aircraft): | [***] | ||||||||||
Aircraft Basic Price (Excluding BFE/SPE): | [***] | Airframe Escalation Data: | |||||||||
Buyer Furnished Equipment (BFE) Estimate: | [***] | Base Year Index (ECI): | [***] | ||||||||
Seller Purchased Equipment (SPE) Estimate: | [***] | Base Year Index (CPI): | [***] | ||||||||
[***] | [***] | ||||||||||
Escalation Estimate | [***] (Amts. Due/Mos. Prior to Delivery): | ||||||||||
Delivery | Number of | Escalation Factor | Adv Payment Base | [***] | [***] | [***] | [***] | [***] | [***] | ||
Date | Aircraft | (Airframe) | Price Per A/P | [***] | [***] | [***] | [***] | [***] | |||
[***] | [***] | [***] | [***] | [***] | [***] | [***] | [***] | [***] | [***] | ||
[***] | [***] | [***] | [***] | [***] | [***] | [***] | [***] | [***] | [***] | ||
[***] | [***] | [***] | [***] | [***] | [***] | [***] | [***] | [***] | [***] | ||
[***] | [***] | [***] | [***] | [***] | [***] | [***] | [***] | [***] | [***] | ||
[***] | [***] | [***] | [***] | [***] | [***] | [***] | [***] | [***] | [***] | ||
[***] | [***] | [***] | [***] | [***] | [***] | [***] | [***] | [***] | [***] | ||
[***] | [***] | [***] | [***] | [***] | [***] | [***] | [***] | [***] | [***] | ||
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[***] | [***] | [***] | [***] | [***] | [***] | [***] | [***] | [***] | [***] | ||
[***] | [***] | [***] | [***] | [***] | [***] | [***] | [***] | [***] | [***] | ||
[***] | [***] | [***] | [***] | [***] | [***] | [***] | [***] | [***] | [***] | ||
[***] | [***] | [***] | [***] | [***] | [***] | [***] | [***] | [***] | [***] | ||
[***] | [***] | [***] | [***] | [***] | [***] | [***] | [***] | [***] | [***] | ||
[***] | [***] | [***] | [***] | [***] | [***] | [***] | [***] | [***] | [***] | ||
[***] | |||||||||||
[***] | |||||||||||
[***] | |||||||||||
[***] |
Airframe Model/MTOW: | 737-900ER | [***] | [***] | ||||||||
Engine Model/Thrust: | CFM56-7B27/B1F | [***] | Detail Specification: | [***] | |||||||
Airframe Price Base Year/Escalation Formula: | [***] | ||||||||||
Airframe Price: | [***] | [***] | Airframe Price Escalation Forecast: | [***] | |||||||
Optional Features:** | [***] | [***] | Engine Price Base Year/Escalation Formula: | [***] | |||||||
Sub-Total of Airframe and Features: | [***] | [***] | |||||||||
Engine Price (Per Aircraft): | [***] | [***] | |||||||||
Aircraft Basic Price (Excluding BFE/SPE): | [***] | [***] | Airframe Escalation Data: | ||||||||
Buyer Furnished Equipment (BFE) Estimate: | [***] | [***] | Base Year Index (ECI): | [***] | |||||||
Seller Purchased Equipment (SPE) Estimate: | [***] | [***] | Base Year Index (CPI): | [***] | |||||||
[***] | [***] | ||||||||||
Escalation Estimate | [***] (Amts. Due/Mos. Prior to Delivery): | ||||||||||
Delivery | Number of | Escalation Factor | Adv Payment Base | [***] | [***] | [***] | [***] | [***] | [***] | ||
Date | Aircraft | (Airframe) | Price Per A/P | [***] | [***] | [***] | [***] | [***] | |||
[***] | [***] | [***] | [***] | [***] | [***] | [***] | [***] | [***] | [***] | ||
[***] | [***] | [***] | [***] | [***] | [***] | [***] | [***] | [***] | [***] | ||
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[***] | |||||||||||
[***] |
Subject: | Revisions to Aircraft General Terms Agreement AGTA-DAL dated October 21, 1997 (AGTA) Terms |
Reference: | Purchase Agreement Nos. 2022, 2023, 2024, 2025 and 2026 (the Purchase Agreements) between The Boeing Company (Boeing) and Delta Air Lines, Inc. (Customer) relating to Model 737-632/-732/-832/-932ER, 757-232, 767-332/332ER, 767-432, 777-232IGW/-232ER/-232LR aircraft (Aircraft) |
1. | The 737-600 is no longer offerable under this Purchase Agreement. All references to the 737-600 are hereby deleted and shall be deemed to be of no further effect. |
2. | Article 1, Definitions, Subject Matter of Sale and Annual Fleet Plan Review is amended as follows: |
THE BOEING COMPANY | ||
By | /s/ Will Witherspoon | |
Will Witherspoon | ||
Its | Attorney-In-Fact | |
ACCEPTED AND AGREED TO this | ||
Date: | December 16, 2015 | |
DELTA AIR LINES, INC. | ||
By: | /s/ Gregory A. May | |
Gregory A. May | ||
Its: | SVP - Supply Chain Management |
1 The number of Shares subject to each RS Installment will be equal to the total number of Shares subject to the Restricted Stock Award divided by three; provided, that if this formula results in any fractional Share allocation to any RS Installment, the number of Shares with respect to which the Restrictions lapse under the First RS Installment and, if necessary, the Second RS Installment, will be increased so that only full Shares are covered by each RS Installment. For example, if a Restricted Stock Award covers 1,000 Shares, the Restrictions will lapse with respect to 334 Shares under the First RS Installment and 333 Shares under each of the Second and Third RS Installments. | ||||
2 For purposes of the 2016 LTIP, one calendar month is calculated from the date of measurement to the same or closest numerical date occurring during the following month. For example, one calendar month from January 31, 2016 will elapse as of February 29, 2016, two months will elapse on March 31, 2016, and so on. | ||||
3 If this formula results in any fractional Share, the Pro Rata RS Portion will be rounded up to the nearest whole Share. |
(1) | “Composite Performance” means, for purposes of determining the total Average Annual Operating Income Margin of the Industry Composite Group, the result obtained by treating the members of the Industry Composite Group as if they were one combined entity. |
(2) | The “Conversion Formula” will apply to convert from cash to Shares the payout, if any, of a Performance Award to a person who is an Executive Officer Participant at the time of such payout. First, the cash amount of the payout is calculated in the same manner as if the payout is being made in cash. Next, the cash amount is converted into a number of Shares based on the following formula: A ÷ B, where: |
(3) | “GAAP” means accounting principles generally accepted in the United States of America. |
(4) | “Industry Composite Group” means Alaska Air Group, Inc., American Airlines Group, Inc., JetBlue Airways Corporation, Southwest Airlines Co., and United Continental Holdings, Inc. |
(5) | “Performance Period” means the period beginning on January 1, 2016 and ending on and including December 31, 2018. |
(1) | The “Average Annual Operating Income Margin” for Delta and each member of the Industry Composite Group shall be calculated by using the subject company’s Operating Income and Total Operating Revenue for the applicable periods and the following formula: (A ÷ B ), where: |
(2) | “Operating Income” means, subject to Section 4(b)(v)(B) below, the subject company’s consolidated operating income for the applicable periods based on its statements of operations contained in reports on Forms 10-Q and 10-K filed with the Securities and Exchange Commission (“SEC”) prepared in accordance with GAAP, but excluding: (i) items presented in the line item “restructuring and other items” or such similar line item; (ii) mark-to-market adjustments for fuel hedges recorded in periods other than the settlement period; and (iii) other special, unusual, or nonrecurring items which are disclosed in publicly available filings with the SEC. |
(3) | “Total Operating Revenue” means, subject to Section 4(b)(v)(B) below, the subject company’s total operating revenue for the applicable periods based on its regularly prepared and publicly available statements of operations prepared in accordance with GAAP; provided, with respect to Delta, Total Operating Revenue shall exclude the portion of revenue associated with refinery sales to third parties net of exchange. |
(1) | The “Customer Service Performance” for Delta shall be measured based on the percentage point improvement in Delta’s average monthly Net Promoter Score (“NPS”) from the 2015 calendar year to the average monthly NPS over the Performance Period, with (A) Delta’s NPS performance attributable to domestic travel accounting for 60% of the measure and (ii) Delta’s NPS performance attributable to international travel accounting for 40% of the measure. The criteria and methodology used to determine Delta’s NPS is described in a document titled, “‘Net Promoter’: Measuring Customer Satisfaction at Delta,” which was previously reviewed by the Committee. Company management will periodically report to the Company’s Board of Directors regarding Delta’s NPS. |
(D) | Return on Invested Capital. |
(1) | The “Return on Invested Capital” for Delta shall be calculated by using Delta’s Average Adjusted Total Operating Income and Average Invested Capital for the applicable periods and the following formula (A/B), where: |
(2) | “Average Adjusted Total Operating Income” means, subject to Section 4(b)(v)(B) below, Delta’s average consolidated operating income for the applicable periods based on its regularly prepared and publicly available statements of operations prepared in accordance with GAAP, but excluding (i) items present in the line item “restructuring and other items” or such similar line item; (ii) mark-to-market adjustments for fuel hedges recorded in periods other than the settlement period; (iii) other special, unusual, or nonrecurring items which are disclosed in publicly available filings with the SEC; and (iv) implied interest in aircraft rent expense, and amortized pension expense related to gains/losses that impact accumulated other comprehensive income (“AOCI”). |
(3) | “Average Invested Capital” means, subject to Section 4(b)(v)(B) below, Delta’s total invested capital determined based on the average of thirteen calendar quarters |
(4) | “Adjusted Book Value of Equity” for Delta shall be calculated quarterly based on its regularly prepared internal financial statements (i) with an initial starting value for the quarter ending December 31, 2015 (the “Initial Value”) equal to the book value of equity determined in accordance with GAAP as of December 31, 2015, but excluding the impact of gains or losses as of December 31, 2015 associated with (1) the cumulative pension and other post-employment retirement benefits net balance recorded in AOCI; (2) the derivative contracts and associated items net balance recorded in AOCI; and (3) the deferred tax asset valuation allowance balance and (ii) using the following formula for each subsequent quarter thereafter, (A+B+C), where: |
(5) | “Adjusted Net Debt” for Delta shall be calculated quarterly based on its regularly prepared internal financial statements using the following formula (A+B-C), subject to Section 4(b)(v)(B), where: |
Performance Measure | Weighting | |||
Threshold (50% of Target) | Target (100% of Target) | Maximum (200% of Target) | ||
Average Annual Operating Income Margin | Composite Performance | 0.5% points above Composite Performance | 1.5% points above Composite Performance | 50% |
Customer Service Performance—Domestic | +0% points | +2.4% points | +3.7% points or higher | 15% |
Customer Service Performance—International | +2.0% points | +4.3% points | +5.7% points or higher | 10% |
Return on Invested Capital | 16.0% | 18.0% | 20.0% or higher | 25% |
4 The number of RSUs subject to each RSU Installment will be equal to the total number of RSUs divided by three; provided, that if this formula results in any fractional RSU allocation to any RSU Installment, the number of RSUs in the First RSU Installment and, if necessary, the Second RSU Installment, will be increased so that only full RSUs are covered by each RSU Installment. For example, if an RSU Award covers 1,000 RSUs, the RSU will vest with respect to 334 RSUs under the First RSU Installment and 333 RSUs under each of the Second and Third RSU Installments. | |||||
5 For purposes of the 2016 LTIP, one calendar month is calculated from the date of measurement to the same or closest numerical date occurring during the following month. For example, one calendar month from January 31, 2016 will elapse as of February 29, 2016, two months will elapse on March 31, 2016, and so on. | |||||
6 If this formula results in any fractional RSUs, the Pro Rata RSU Portion will be rounded up to the nearest whole RSU. |
(1) | If there is a payout under the Company’s broad-based employee profit sharing program for ground and flight attendant employees (the “Profit Sharing Program”) for 2016, the Option shall vest and become exercisable with respect to one-third of the Shares on each of the following dates: (I) February 1, 2017 (the “First Option Installment”), (II) February 1, 2018 (the “Second Option Installment”) and (III) February 1, 2019 (the “Third Option Installment”); or |
(2) | If there is no payout under the Profit Sharing Program for 2016, but there is a payout under the Profit Sharing Program for 2017, the Option shall vest and become exercisable with respect to (I) the First and Second Option Installments on February 1, 2018 and (II) the Third Option Installment on February 1, 2019; and |
7 If this formula results in any fractional Share, the Pro Rata Option Portion will be rounded up to the nearest whole Share. |
Performance Measures and Weightings | |||||
Employment Level | % of Target MIP Award allocated to Financial Performance | % of Target MIP Award allocated to Operational Performance | % of Target MIP Award Allocated to Revenue Performance | % of Target MIP Award allocated to Leadership Effectiveness Performance | % of Target MIP Award allocated to Individual Performance |
CEO | 50% | 25% | 25% | 0% | 0% |
President | 50% | 25% | 25% | 0% | 0% |
EVP | 50% | 25% | 25% | 0% | 0% |
CIO and SVP – Supply Chain Management | 50% | 25% | 25% | 0% | 0% |
SVP | 50% | 25% | 15% | 10% | 0% |
VP | 50% | 25% | 15% | 10% | 0% |
Managing Director (Grade 13) | 35% | 15% | 10% | 0% | 40% |
Director (Grade 12) | 35% | 15% | 10% | 0% | 40% |
General Manager (Grade 11) | 25% | 15% | 10% | 0% | 50% |
Grade 10 | 0% | 0% | 0% | 0% | 100% |
Grade 8 | 0% | 0% | 0% | 0% | 100% |
Threshold | Target | Maximum | |
% of Target Financial Performance Measure Paid | 50% | 100% | 200% |
Required 2016 Pre-Tax Income | $6,220 Million | $7,454 Million | $8,078 Million |
Below Threshold | Threshold | Target | Maximum | |
Shared Rewards Program | ||||
% of Target Payout for this Performance Measure (75% Weighting) | 0% | 37.50% | 75% | 150% |
Number of monthly Shared Rewards Program goals actually met during 2016 | 15 or less | 16 | 21 | 26 or more |
Delta Connection Goals | ||||
% of Target Payout for this Performance Measure (25% Weighting) | 0% | 12.50% | 25% | 50% |
Number of Delta Connection Goals actually met during 2016 | 8 or less | 9 | 14 | 19 or more |
1 The Profit Sharing Program for 2016 defines “Pre-Tax Income” as follows: for any calendar year, the Company’s consolidated pre-tax income calculated in accordance with Generally Accepted Accounting Principles in the United States (“GAAP”) and as reported in the Company’s public securities filings, but excluding: (a) all asset write downs related to long term assets; (b) gains or losses with respect to special, unusual, or nonrecurring items; and (c) expense accrued with respect to any employee profit sharing plan, program or similar arrangement, including, without limitation, the Profit Sharing Program and the Delta Air Lines, Inc. Annual Profit Sharing Plan. | |||||
Threshold | Target | Maximum | |
% of Target Revenue Performance Measure Paid | 50% | 100% | 200% |
Delta’s 2016 TRASM over 2015 TRASM relative to Industry Group Average TRASM for the same period | 2015 TRASM minus 1.0% points | 2015 TRASM | 2015 TRASM plus 1.0% points or more |
2 If this formula results in any fractional share, the MIP Restricted Stock will be rounded up to the next highest ten shares. |
3 For purposes of the MIP, one calendar month is calculated from the date of measurement to the same or closest numerical date occurring during the following month. For example, one calendar month from January 31, 2016 will elapse as of February 29, 2016, two months will elapse on March 31, 2016, and so on. |
Completion Factor 2016 Goal | On-Time Arrival Performance 2016 Goal | |||
Month in 2016 | Relative CF | Absolute CF | Relative A14 | Absolute A14 |
January | 1st | 97.4% | 1st | 80.7% |
February | 1st | 97.2% | 1st | 81.1% |
March | 1st | 98.3% | 1st | 82.4% |
April | 1st | 98.9% | 1st | 84.2% |
May | 1st | 98.8% | 1st | 84.3% |
June | 1st | 98.4% | 1st | 80.6% |
July | 1st | 98.4% | 1st | 81.0% |
August | 1st | 98.6% | 1st | 83.0% |
September | 1st | 99.3% | 1st | 86.7% |
October | 1st | 99.1% | 1st | 86.2% |
November | 1st | 99.1% | 1st | 86.3% |
December | 1st | 98.0% | 1st | 80.7% |
Overall | 1st | 98.5% | 1st | 83.1% |
A. | The primary source of reported metrics used to calculate performance will be each Delta Connection carrier’s data which flows into Delta’s data warehouse. |
B. | All domestic and international Delta Connection carrier system operations subject to capacity purchase agreements and/or revenue proration agreements will be included in the performance measures, including the operations of Chautauqua, Compass, ExpressJet, GoJet, Endeavor Air, Shuttle America and SkyWest, but excluding any revenue proration operations with respect to which passenger reservations are not reflected on Delta’s reservations system (the “Delta Connection Program”). In the event that a carrier enters or leaves the Delta Connection Program, that carrier’s operations will be included or excluded from the performance measures as applicable. |
C. | The monthly calculation for completion factor will be as follows: |
1. | Add all Delta Connection scheduled system operations for the month. |
2. | Add all Delta Connection system completed flights for the month (including flights canceled by one carrier and covered by another via an extra section, which also includes flights changed to Delta aircraft). |
3. | Divide the result of C.2 by the result of C.1 for a combined Delta Connection system completion factor. |
D. | The monthly calculation for on-time performance will be as follows: |
1. | Add all Delta Connection completed system operations for the month. |
2. | Add all Delta Connection system on time operations for the month. On time operations are defined as the number of flights that arrive at the scheduled destination within 15 minutes of the scheduled arrival time. |
3. | Divide the result of D.2 by the result of D.1 for a combined Delta Connection system on-time performance measure. |
E. | All calculations will be performed and validated by Delta Connection Operations. |
F. | The comparator group for the relative measure shall include the regional portfolios for Alaska Air Group, Inc., United Continental Holdings, Inc. and American Airlines Group, Inc. and the data is compiled by a third party selected by the Company. |
Year Ended December 31, | |||||||||||||||
(in millions, except for ratio data) | 2015 | 2014 | 2013 | 2012 | 2011 | ||||||||||
Earnings before income taxes | $ | 7,157 | $ | 1,072 | $ | 2,527 | $ | 1,025 | $ | 769 | |||||
Add (deduct): | |||||||||||||||
Fixed charges from below | 584 | 737 | 947 | 1,116 | 1,202 | ||||||||||
Capitalized interest | (36 | ) | (33 | ) | (29 | ) | (21 | ) | (9 | ) | |||||
Earnings as adjusted | $ | 7,705 | $ | 1,776 | $ | 3,445 | $ | 2,120 | $ | 1,962 | |||||
Fixed charges: | |||||||||||||||
Interest expense, including capitalized amounts and amortization of debt costs | $ | 534 | $ | 691 | $ | 891 | $ | 1,044 | $ | 1,122 | |||||
Portion of rental expense representative of the interest factor | 50 | 46 | 56 | 72 | 80 | ||||||||||
Fixed charges | $ | 584 | $ | 737 | $ | 947 | $ | 1,116 | $ | 1,202 | |||||
Ratio of earnings to fixed charges | 13.19 | 2.41 | 3.64 | 1.90 | 1.63 |
Year Ended December 31, | |||||||||||||||
(in millions) | 2015 | 2014 | 2013 | 2012 | 2011 | ||||||||||
MTM adjustments and settlements | $ | 1,301 | $ | (2,346 | ) | $ | 276 | $ | 27 | $ | (26 | ) | |||
Restructuring and other | (35 | ) | (716 | ) | (424 | ) | (452 | ) | (242 | ) | |||||
Loss on extinguishment of debt | — | (268 | ) | — | (118 | ) | (68 | ) | |||||||
Virgin Atlantic MTM adjustments | 26 | (134 | ) | — | — | — | |||||||||
Total income (loss) | $ | 1,292 | $ | (3,464 | ) | $ | (148 | ) | $ | (543 | ) | $ | (336 | ) |
NAME OF SUBSIDIARY | JURISDICTION OF INCORPORATION OR ORGANIZATION | |
Aero Assurance Ltd. | Vermont | |
DAL Global Services, LLC | Delaware | |
Delta Material Services, LLC | Delaware | |
Delta Private Jets, Inc. | Kentucky | |
Endeavor Air, Inc. | Georgia | |
Epsilon Trading, LLC | Delaware | |
MIPC, LLC | Delaware | |
MLT Vacations, Inc. | Minnesota | |
Monroe Energy, LLC | Delaware | |
New Sky, Ltd. | Bermuda |
(1) | Registration Statement No. 333-142424 on Form S-8 pertaining to Delta Air Lines, Inc. 2007 Performance Compensation Plan, |
(2) | Registration Statement No. 333-149308 on Form S-8 pertaining to Delta Air Lines, Inc. 2007 Performance Compensation Plan, |
(3) | Registration Statement No. 333-154818 on Form S-8 pertaining to Delta Air Lines, Inc. 2007 Performance Compensation Plan, and |
(4) | Registration Statement No. 333-151060 on Form S-8 pertaining to Northwest Airlines Corporation 2007 Stock Incentive Plan; |
/s/ Ernst & Young LLP | |
Atlanta, Georgia | |
February 5, 2016 |
1. | I have reviewed this annual report on Form 10-K of Delta Air Lines, Inc. (“Delta”) for the fiscal year ended December 31, 2015; |
2. | Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report; |
3. | Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of Delta as of, and for, the periods presented in this report; |
4. | Delta's other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for Delta and have: |
(a) | Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to Delta, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared; |
(b) | Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles; |
(c) | Evaluated the effectiveness of Delta's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and |
(d) | Disclosed in this report any change in Delta's internal control over financial reporting that occurred during Delta's most recent fiscal quarter that has materially affected, or is reasonably likely to materially affect, Delta's internal control over financial reporting; and |
5. | Delta's other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to Delta's auditors and the Audit Committee of Delta's Board of Directors (or persons performing the equivalent functions): |
(a) | All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect Delta's ability to record, process, summarize and report financial information; and |
(b) | Any fraud, whether or not material, that involves management or other employees who have a significant role in Delta's internal control over financial reporting. |
February 5, 2016 | /s/ Richard H. Anderson |
Richard H. Anderson | |
Chief Executive Officer |
1. | I have reviewed this annual report on Form 10-K of Delta Air Lines, Inc. (“Delta”) for the fiscal year ended December 31, 2015; |
2. | Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report; |
3. | Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of Delta as of, and for, the periods presented in this report; |
4. | Delta's other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for Delta and have: |
(a) | Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to Delta, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared; |
(b) | Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles; |
(c) | Evaluated the effectiveness of Delta's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and |
(d) | Disclosed in this report any change in Delta's internal control over financial reporting that occurred during Delta's most recent fiscal quarter that has materially affected, or is reasonably likely to materially affect, Delta's internal control over financial reporting; and |
5. | Delta's other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to Delta's auditors and the Audit Committee of Delta's Board of Directors (or persons performing the equivalent functions): |
(a) | All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect Delta's ability to record, process, summarize and report financial information; and |
(b) | Any fraud, whether or not material, that involves management or other employees who have a significant role in Delta's internal control over financial reporting. |
February 5, 2016 | /s/ Paul A. Jacobson |
Paul A. Jacobson | |
Executive Vice President and Chief Financial Officer |
1. | such Report fully complies with the requirements of Section 13(a) of the Securities Exchange Act of 1934; and |
2. | the information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of Delta. |
/s/ Richard H. Anderson | |
Richard H. Anderson | |
Chief Executive Officer | |
/s/ Paul A. Jacobson | |
Paul A. Jacobson | |
Executive Vice President and Chief Financial Officer | |
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Document and Entity Information - USD ($) $ in Billions |
12 Months Ended | ||
---|---|---|---|
Dec. 31, 2015 |
Jan. 31, 2016 |
Jun. 30, 2015 |
|
Document and Entity Information [Abstract] | |||
Document Type | 10-K | ||
Amendment Flag | false | ||
Document Period End Date | Dec. 31, 2015 | ||
Document Fiscal Year Focus | 2015 | ||
Document Fiscal Period Focus | FY | ||
Entity Registrant Name | DELTA AIR LINES INC /DE/ | ||
Entity Central Index Key | 0000027904 | ||
Current Fiscal Year End Date | --12-31 | ||
Entity Well-known Seasoned Issuer | Yes | ||
Entity Voluntary Filers | No | ||
Entity Current Reporting Status | Yes | ||
Entity Filer Category | Large Accelerated Filer | ||
Entity Public Float | $ 32.7 | ||
Entity Common Stock, Shares Outstanding | 778,508,621 |
Consolidated Balance Sheets (Parentheticals) - USD ($) $ in Millions |
Dec. 31, 2015 |
Dec. 31, 2014 |
---|---|---|
Current Assets: | ||
Allowance for uncollectible accounts | $ 9 | $ 11 |
Allowance for obsolescence | 114 | 127 |
Property, Plant and Equipment | ||
Accumulated depreciation and amortization | 10,871 | 9,340 |
Other Assets: | ||
Accumulated amortization | $ 811 | $ 793 |
Stockholders' Equity: | ||
Common stock, par value (usd per share) | $ 0.0001 | $ 0.0001 |
Common stock, shares authorized | 1,500,000,000 | 1,500,000,000 |
Common stock, shares issued | 799,850,675 | 845,048,310 |
Treasury Stock, at cost, shares | 21,066,684 | 19,790,077 |
Consolidated Statements of Comprehensive Income (Loss) - USD ($) $ in Millions |
12 Months Ended | ||
---|---|---|---|
Dec. 31, 2015 |
Dec. 31, 2014 |
Dec. 31, 2013 |
|
Statement of Comprehensive Income [Abstract] | |||
Net Income | $ 4,526 | $ 659 | $ 10,540 |
Net (loss) gain on foreign currency and interest rate derivatives | (82) | 3 | 482 |
Net change in pension and other benefits | 163 | (2,194) | 2,984 |
Net (loss) gain on investments | (45) | 10 | (19) |
Total Other Comprehensive Income (Loss) | 36 | (2,181) | 3,447 |
Comprehensive Income (Loss) | $ 4,562 | $ (1,522) | $ 13,987 |
Consolidated Statements of Stockholders' Equity (Deficit) (Parentheticals) - $ / shares |
12 Months Ended | ||
---|---|---|---|
Dec. 31, 2015 |
Dec. 31, 2014 |
Dec. 31, 2013 |
|
Statement of Stockholders' Equity [Abstract] | |||
weighted average price per treasury share withheld for taxes (per share) | $ 46.83 | $ 31.46 | $ 14.97 |
Summary of Significant Accounting Policies |
12 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Dec. 31, 2015 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Accounting Policies [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Summary of Significant Accounting Policies | SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Basis of Presentation Delta Air Lines, Inc., a Delaware corporation, provides scheduled air transportation for passengers and cargo throughout the United States (“U.S.”) and around the world. Our Consolidated Financial Statements include the accounts of Delta Air Lines, Inc. and our wholly-owned subsidiaries and have been prepared in accordance with accounting principles generally accepted in the U.S. (“GAAP”). We do not consolidate the financial statements of any company in which we have an ownership interest of 50% or less. We are not the primary beneficiary of, nor do we have a controlling financial interest in, any variable interest entity. Accordingly, we have not consolidated any variable interest entity. We have marketing alliances with other airlines to enhance our access to domestic and international markets. These arrangements may include codesharing, reciprocal frequent flyer program benefits, shared or reciprocal access to passenger lounges, joint promotions, common use of airport gates and ticket counters, ticket office co-location and other marketing agreements. We have received antitrust immunity for certain marketing arrangements, which enables us to offer a more integrated route network and develop common sales, marketing and discount programs for customers. Some of our marketing arrangements provide for the sharing of revenues and expenses. Revenues and expenses associated with collaborative arrangements are presented on a gross basis in the applicable line items on our Consolidated Statements of Operations. We reclassified certain prior period amounts to conform to the current period presentation. Unless otherwise noted, all amounts disclosed are stated before consideration of income taxes. Use of Estimates We are required to make estimates and assumptions when preparing our Consolidated Financial Statements in accordance with GAAP. These estimates and assumptions affect the amounts reported in our Consolidated Financial Statements and the accompanying notes. Actual results could differ materially from those estimates. Recent Accounting Standards Revenue from Contracts with Customers In May 2014, the Financial Accounting Standards Board ("FASB") issued Accounting Standards Update ("ASU") No. 2014-09, "Revenue from Contracts with Customers." Under the new standard, revenue is recognized at the time a good or service is transferred to a customer for the amount of consideration received for that specific good or service. Entities may use a full retrospective approach or report the cumulative effect as of the date of adoption. In August 2015, the FASB issued ASU No. 2015-14, "Revenue from Contracts with Customers (Topic 606): Deferral of the Effective Date," that deferred the effective date by one year to December 15, 2017 for interim and annual reporting periods beginning after that date. The FASB permitted early adoption of the standard, but not before the original effective date of December 15, 2016. We are currently evaluating how the adoption of this standard will impact our Consolidated Financial Statements. Presentation of Debt Issuance Costs During 2015, the FASB issued ASU Nos. 2015-03 and 2015-15, related to simplifying the presentation of debt issuance costs. These standards amend existing guidance to require the presentation of debt issuance costs in the balance sheet as a deduction from the carrying amount of the related debt liability instead of as a deferred charge. It is effective for annual reporting periods beginning after December 15, 2015, but early adoption is permitted. We early adopted these standards in the December 2015 quarter, which we accounted for as a change in accounting principle and applied the guidance retrospectively. This change results in a reclassification of $32 million from prepaid expenses and other to current maturities of long-term debt and capital leases and $84 million from other noncurrent assets to long-term debt and capital leases as of December 31, 2014. Disclosures for Investments in Certain Entities That Calculate Net Asset Value per Share In May 2015, the FASB issued ASU No. 2015-07, "Disclosures for Investments in Certain Entities That Calculate Net Asset Value per Share (or Its Equivalent)." Under the new standard, investments for which fair value is measured at net asset value per share (or its equivalent) using the practical expedient will no longer be categorized in the fair value hierarchy. It is effective for interim and annual reporting periods beginning after December 15, 2015, but early adoption is permitted. We will adopt this standard effective January 1, 2016. We are currently assessing how the adoption of this standard will impact our Consolidated Financial Statements as our pension plan has a significant number of investments measured at net asset value. Balance Sheet Classification of Deferred Taxes In November 2015, the FASB issued ASU No. 2015-17, "Balance Sheet Classification of Deferred Taxes." This standard requires that deferred tax liabilities and assets be classified as noncurrent on the balance sheet. It is effective for interim and annual periods beginning after December 15, 2016, but early adoption is permitted. We early adopted this standard in the December 2015 quarter, which we accounted for as a change in accounting principle and applied the guidance retrospectively. This change results in the reclassification of $3.3 billion from current assets to deferred income taxes, net in other assets on our December 31, 2014 Consolidated Balance Sheet. Financial Instruments In January 2016, the FASB issued ASU No. 2016-01, "Financial Instruments—Overall (Subtopic 825-10)." This standard makes several modifications to Subtopic 825-10 including the elimination of the available-for-sale classification of equity investments, and requires equity investments with readily determinable fair values to be measured at fair value with changes in fair value recognized in net income. It is effective for interim and annual periods beginning after December 15, 2017. Our investments in the parent companies of Aeroméxico and GOL are currently accounted for as available-for-sale with changes in fair value recognized in other comprehensive income. At the time of adoption, any amounts in accumulated other comprehensive income/(loss) ("AOCI") related to equity investments would be reclassified to non-operating expense/income. As of December 31, 2015, a net unrealized loss of $66 million related to these investments was recorded in AOCI on our Consolidated Balance Sheet. Cash and Cash Equivalents and Short-Term Investments Short-term, highly liquid investments with maturities of three months or less when purchased are classified as cash and cash equivalents. Investments with maturities of greater than three months, but not in excess of one year, when purchased are classified as short-term investments. Investments with maturities beyond one year when purchased may be classified as short-term investments if they are expected to be available to support our short-term liquidity needs. All short-term investments are classified as either available-for-sale or held-to-maturity and realized gains and losses are recorded using the specific identification method. Accounts Receivable Accounts receivable primarily consist of amounts due from credit card companies from the sale of passenger airline tickets, customers of our aircraft maintenance and cargo transportation services and other companies for the purchase of mileage credits under our frequent flyer program (the "SkyMiles Program"). We provide an allowance for uncollectible accounts equal to the estimated losses expected to be incurred based on historical chargebacks, write-offs, bankruptcies and other specific analyses. Bad debt expense was not material in any period presented. Inventories Spare Parts. Inventories of expendable parts related to flight equipment, which cannot be economically repaired, reconditioned or reused after removal from the aircraft, are carried at moving average cost and charged to operations as consumed. An allowance for obsolescence is provided over the remaining useful life of the related fleet. We also provide allowances for parts identified as excess or obsolete to reduce the carrying costs to the lower of cost or net realizable value. These parts are assumed to have an estimated residual value of 5% of the original cost. Refinery. Refined product, feedstock and blendstock inventories, all of which are finished goods, are carried at recoverable cost. We use jet fuel produced by the refinery and procured through the exchange with third parties of gasoline, diesel and other refined products ("non-jet fuel products") the refinery produces in our airline operations. Cost is determined using the first-in, first-out method. Costs include the raw material consumed plus direct manufacturing costs (such as labor, utilities and supplies) as incurred and an applicable portion of manufacturing overhead. Accounting for Refinery Related Buy/Sell Agreements To the extent that we receive jet fuel for non-jet fuel products exchanged under buy/sell agreements, we account for these transactions as nonmonetary exchanges. We have recorded these nonmonetary exchanges at the carrying amount of the non-jet fuel products transferred within aircraft fuel and related taxes on the Consolidated Statements of Operations. Derivatives Changes in aircraft fuel prices, interest rates and foreign currency exchange rates impact our results of operations. In an effort to manage our exposure to these risks, we enter into derivative contracts and adjust our derivative portfolio as market conditions change. We recognize derivative contracts at fair value on our Consolidated Balance Sheets. Not Designated as Accounting Hedges. We do not designate our fuel derivative contracts as accounting hedges. We record changes in the fair value of our fuel hedges in aircraft fuel and related taxes. These changes in fair value include settled gains and losses as well as mark-to-market adjustments ("MTM adjustments"). MTM adjustments are defined as fair value changes recorded in periods other than the settlement period. Such fair value changes are not necessarily indicative of the actual settlement value of the underlying hedge in the contract settlement period. Designated as Cash Flow Hedges. For derivative contracts designated as cash flow hedges (interest rate contracts and foreign currency exchange contracts), the effective portion of the gain or loss on the derivative is reported as a component of AOCI and reclassified into earnings in the same period in which the hedged transaction affects earnings. The effective portion of the derivative represents the change in fair value of the hedge that offsets the change in fair value of the hedged item. To the extent the change in the fair value of the hedge does not perfectly offset the change in the fair value of the hedged item, the ineffective portion of the hedge is immediately recognized in other expense. Designated as Fair Value Hedges. For derivative contracts designated as fair value hedges (interest rate contracts), the gain or loss on the derivative is reported in earnings and an equivalent amount is reflected as a change in the carrying value of long-term debt and capital leases, with an offsetting loss or gain recognized in current earnings. We include the gain or loss on the hedged item in the same account as the offsetting loss or gain on the related derivative contract, resulting in no impact to our Consolidated Statements of Operations. The following table summarizes the risk each type of derivative contract is hedging and the classification of related gains and losses on our Consolidated Statements of Operations:
The following table summarizes the accounting treatment of our derivative contracts:
We perform, at least quarterly, an assessment of the effectiveness of our derivative contracts designated as hedges, including assessing the possibility of counterparty default. If we determine that a derivative is no longer expected to be highly effective, we discontinue hedge accounting prospectively and recognize subsequent changes in the fair value of the hedge in earnings. We believe our derivative contracts that continue to be designated as hedges, consisting of interest rate and foreign currency exchange contracts, will continue to be highly effective in offsetting changes in fair value or cash flow, respectively, attributable to the hedged risk. Cash flows associated with purchasing and settling hedge contracts generally are classified as operating cash flows. However, if a hedge contract includes a significant financing element at inception, cash flows associated with the hedge contract are recorded as financing cash flows. Hedge Margin. In accordance with our fuel, interest rate and foreign currency hedge contracts, we may require counterparties to fund the margin associated with our gain position and/or counterparties may require us to fund the margin associated with our loss position on these contracts. The amount of the margin, if any, is periodically adjusted based on the fair value of the hedge contracts. The margin requirements are intended to mitigate a party's exposure to the risk of contracting party default. We do not offset margin funded to counterparties or margin funded to us by counterparties against fair value amounts recorded for our hedge contracts. The hedge margin we receive from counterparties is recorded in cash and cash equivalents or prepaid expenses and other, with the offsetting obligation in accounts payable. The hedge margin we provide to counterparties is recorded in hedge margin receivable. Passenger Tickets We record sales of passenger tickets in air traffic liability. Passenger revenue is recognized when we provide transportation or when the ticket expires unused, reducing the related air traffic liability. We periodically evaluate the estimated air traffic liability and record any adjustments in our Consolidated Statements of Operations. These adjustments relate primarily to refunds, exchanges, transactions with other airlines and other items for which final settlement occurs in periods subsequent to the sale of the related tickets at amounts other than the original sales price. Passenger Taxes and Fees We are required to charge certain taxes and fees on our passenger tickets, including U.S. federal transportation taxes, federal security charges, airport passenger facility charges and foreign arrival and departure taxes. These taxes and fees are assessments on the customer for which we act as a collection agent. Because we are not entitled to retain these taxes and fees, we do not include such amounts in passenger revenue. We record a liability when the amounts are collected and reduce the liability when payments are made to the applicable government agency or operating carrier. Frequent Flyer Program Our SkyMiles Program offers incentives to travel on Delta. This program allows customers to earn mileage credits by flying on Delta, Delta Connection and airlines that participate in the SkyMiles Program, as well as through participating companies such as credit card companies, hotels and car rental agencies. We sell mileage credits to non-airline businesses, customers and other airlines. Effective January 1, 2015, the SkyMiles program was modified from a model in which customers earn redeemable mileage credits based on distance traveled to a model based on ticket price. This award change did not affect the way we account for the program. The SkyMiles Program includes two types of transactions that are considered revenue arrangements with multiple deliverables. As discussed below, these are (1) passenger ticket sales earning mileage credits and (2) the sale of mileage credits to participating companies with which we have marketing agreements. Mileage credits are a separate unit of accounting as they can be redeemed by customers in future periods for air travel on Delta and participating airlines, membership in our Sky Club and other program awards. Passenger Ticket Sales Earning Mileage Credits. Passenger ticket sales earning mileage credits under our SkyMiles Program provide customers with two deliverables: (1) mileage credits earned and (2) air transportation. We value each deliverable on a standalone basis. Our estimate of the selling price of a mileage credit is based on an analysis of our sales of mileage credits to other airlines and customers, which is re-evaluated at least annually. We use established ticket prices to determine the estimated selling price of air transportation. We allocate the total amount collected from passenger ticket sales between the deliverables based on their relative selling prices. We defer revenue for the mileage credits related to passenger ticket sales when the credits are earned and recognize it as passenger revenue when miles are redeemed and services are provided. We record the air transportation portion of the passenger ticket sales in air traffic liability and recognize these amounts in passenger revenue when we provide transportation or when the ticket expires unused. Sale of Mileage Credits. Customers may earn mileage credits through participating companies such as credit card companies, hotels and car rental agencies with which we have marketing agreements to sell mileage credits. Our contracts to sell mileage credits under these marketing agreements have multiple deliverables, as defined below. Our most significant contract to sell mileage credits relates to our co-brand credit card relationship with American Express. Our agreements with American Express provide for joint marketing, grant certain benefits to Delta-American Express co-branded credit card holders ("Cardholders") and American Express Membership Rewards Program participants and allow American Express to market using our customer database. Cardholders earn mileage credits for making purchases using co-branded cards, may check their first bag for free, are granted discounted access to Delta Sky Club lounges and receive other benefits while traveling on Delta. These benefits that we provide in the form of separate products and services under the SkyMiles agreements are referred to as "deliverables." Additionally, participants in the American Express Membership Rewards program may exchange their points for mileage credits under the SkyMiles Program. As a result, we sell mileage credits at agreed-upon rates to American Express for provision to their customers under the co-brand credit card program and the Membership Rewards program. In December 2014, we amended our marketing agreements with American Express which increased the value we receive under the agreements and extended the term to 2022. The amended agreements became effective January 1, 2015. The deliverables under the amended agreements are substantially similar to the previous agreement. We account for the amended agreements consistent with the accounting method adopted in September 2013 that allocates the consideration received to the individual products and services delivered based on their relative selling prices (discussed below). The increased value received under the amended agreements increases the amount of deferred revenue for the travel component and increases the value of the other deliverables, which are recognized in other revenue as they are provided. In September 2013, we modified our marketing agreements with American Express, which required us to change the accounting method for recording SkyMiles sold. Under the previous method, the embedded premium or discount was allocated to the residual products or services in a combined transaction. The new method allocates consideration received based on the relative selling price of each product or service. We determined our best estimate of the selling prices by considering discounted cash flow analysis using multiple inputs and assumptions, including: (1) the expected number of miles awarded and number of miles redeemed, (2) the rate at which we sell mileage credits to other airlines, (3) published rates on our website for baggage fees, discounted access to Delta Sky Club lounges and other benefits while traveling on Delta and (4) brand value. The impact of adopting the relative selling price method re-allocated a portion of the embedded discount to the travel component, lowering the deferral rate we use to record miles sold under the agreements and increasing revenue recognized on the remaining deliverables. We recognize revenue as we deliver each sales element. We defer the travel deliverable (mileage credits) as part of frequent flyer deferred revenue and recognize passenger revenue as the mileage credits are used for travel. The revenue allocated to the remaining deliverables is recorded in other revenue. We recognize the revenue for these services as they are performed. Breakage. For mileage credits that we estimate are not likely to be redeemed (“breakage”), we recognize the associated value proportionally during the period in which the remaining mileage credits are expected to be redeemed. Management uses statistical models to estimate breakage based on historical redemption patterns. A change in assumptions as to the period over which mileage credits are expected to be redeemed, the actual redemption activity for mileage credits or the estimated fair value of mileage credits expected to be redeemed could have a material impact on our revenue in the year in which the change occurs and in future years. Regional Carriers Revenue Our regional carriers include both our contract carrier agreements with third-party regional carriers ("contract carriers") and our wholly-owned subsidiary, Endeavor. In May 2013, Endeavor emerged from bankruptcy and we became its sole owner pursuant to a confirmed plan of reorganization. Our contract carrier agreements are structured as either (1) capacity purchase agreements where we purchase all or a portion of the contract carrier's capacity and are responsible for selling the seat inventory we purchase or (2) revenue proration agreements, which are based on a fixed dollar or percentage division of revenues for tickets sold to passengers traveling on connecting flight itineraries. We record revenue related to our contract carriers and Endeavor in regional carriers passenger revenue and the related expenses in regional carriers expense. Cargo Revenue Cargo revenue is recognized when we provide the transportation. Other Revenue Other revenue is primarily comprised of (1) the non-travel components of the sale of mileage credits discussed above, (2) baggage fee revenue, (3) other miscellaneous service revenue, including ticket change fees, (4) revenue from ancillary businesses, such as the aircraft maintenance and repair and staffing services we provide to third parties and (5) sales of non-jet fuel products to third parties by our oil refinery. Long-Lived Assets The following table summarizes our property and equipment:
We record property and equipment at cost and depreciate or amortize these assets on a straight-line basis to their estimated residual values over their estimated useful lives. The estimated useful life for leasehold improvements is the shorter of lease term or estimated useful life. Depreciation and amortization expense related to our property and equipment was $1.8 billion, $1.7 billion and $1.6 billion for each of the years ended December 31, 2015, 2014 and 2013, respectively. Residual values for owned aircraft, engines, spare parts and simulators are generally 5% to 10% of cost. We capitalize certain internal and external costs incurred to develop and implement software, and amortize those costs over an estimated useful life of three to seven years. Included in the depreciation and amortization expense discussed above, we recorded $148 million, $129 million and $110 million for amortization of capitalized software for the years ended December 31, 2015, 2014 and 2013, respectively. The net book value of these assets totaled $420 million and $411 million at December 31, 2015 and 2014, respectively. We record impairment losses on flight equipment and other long-lived assets used in operations when events and circumstances indicate the assets may be impaired and the estimated future cash flows generated by those assets are less than their carrying amounts. Factors which could cause impairment include, but are not limited to, (1) a decision to permanently remove flight equipment or other long-lived assets from operations, (2) significant changes in the estimated useful life, (3) significant changes in projected cash flows, (4) permanent and significant declines in fleet fair values and (5) changes to the regulatory environment. For long-lived assets held for sale, we discontinue depreciation and record impairment losses when the carrying amount of these assets is greater than the fair value less the cost to sell. To determine whether impairments exist for aircraft used in operations, we group assets at the fleet-type level (the lowest level for which there are identifiable cash flows) and then estimate future cash flows based on projections of capacity, passenger mile yield, fuel costs, labor costs and other relevant factors. If an impairment occurs, the impairment loss recognized is the amount by which the fleet's carrying amount exceeds its estimated fair value. We estimate aircraft fair values using published sources, appraisals and bids received from third parties, as available. Goodwill and Other Intangible Assets Our goodwill and identifiable intangible assets relate to the airline segment. We apply a fair value-based impairment test to the carrying value of goodwill and indefinite-lived intangible assets on an annual basis (as of October 1) and, if certain events or circumstances indicate that an impairment loss may have been incurred, on an interim basis. We assess the value of our goodwill and indefinite-lived assets under either a qualitative or quantitative approach. Under a qualitative approach, we consider various market factors, including the key assumptions listed below. We analyze these factors to determine if events and circumstances have affected the fair value of goodwill and indefinite-lived intangible assets. If we determine that it is more likely than not that the asset may be impaired, we use the quantitative approach to assess the asset's fair value and the amount of the impairment. Under a quantitative approach, we calculate the fair value of the asset using the key assumptions listed below. If the asset's carrying value exceeds its fair value calculated using the quantitative approach, we will record an impairment charge for the difference in fair value and carrying value. We value goodwill and indefinite-lived intangible assets primarily using market capitalization and income approach valuation techniques. These measurements include the following key assumptions: (1) forecasted revenues, expenses and cash flows, (2) terminal period revenue growth and cash flows, (3) an estimated weighted average cost of capital, (4) assumed discount rates depending on the asset and (5) a tax rate. These assumptions are consistent with those hypothetical market participants would use. Since we are required to make estimates and assumptions when evaluating goodwill and indefinite-lived intangible assets for impairment, actual transaction amounts may differ materially from these estimates. Changes in certain events and circumstances could result in impairment. Factors which could cause impairment include, but are not limited to, (1) negative trends in our market capitalization, (2) reduced profitability resulting from lower passenger mile yields or higher input costs (primarily related to fuel and employees), (3) lower passenger demand as a result of weakened U.S. and global economies, (4) interruption to our operations due to a prolonged employee strike, terrorist attack, or other reasons, (5) changes to the regulatory environment (e.g., diminished slot restrictions or additional Open Skies agreements), (6) competitive changes by other airlines and (7) strategic changes to our operations leading to diminished utilization of the intangible assets. Goodwill. When we evaluate goodwill for impairment using a quantitative approach, we estimate the fair value of the reporting unit by considering both market capitalization and projected discounted future cash flows (an income approach). If the reporting unit's fair value exceeds its carrying value, no further testing is required. If, however, the reporting unit's carrying value exceeds its fair value, we then determine the amount of the impairment charge, if any. We recognize an impairment charge if the carrying value of the reporting unit's goodwill exceeds its estimated fair value. Identifiable Intangible Assets. Indefinite-lived assets are not amortized and consist of routes, slots, the Delta tradename and assets related to SkyTeam. Definite-lived intangible assets consist primarily of marketing agreements and are amortized on a straight-line basis or under the undiscounted cash flows method over the estimated economic life of the respective agreements. Costs incurred to renew or extend the term of an intangible asset are expensed as incurred. We assess our indefinite-lived assets under a qualitative or quantitative approach. We analyze market factors to determine if events and circumstances have affected the fair value of the indefinite-lived intangible assets. If we determine that it is more likely than not that the asset value may be impaired, we use the quantitative approach to assess the asset's fair value and the amount of the impairment. We perform the quantitative impairment test for indefinite-lived intangible assets by comparing the asset's fair value to its carrying value. Fair value is estimated based on (1) recent market transactions, where available, (2) the royalty method for the Delta tradename (which assumes hypothetical royalties generated from using our tradename) or (3) projected discounted future cash flows (an income approach). We recognize an impairment charge if the asset's carrying value exceeds its estimated fair value. Income Taxes We account for deferred income taxes under the liability method. We recognize deferred tax assets and liabilities based on the tax effects of temporary differences between the financial statement and tax basis of assets and liabilities, as measured by current enacted tax rates. Deferred tax assets and liabilities are recorded net as noncurrent deferred income taxes. A valuation allowance is recorded to reduce deferred tax assets when necessary. Manufacturers' Credits We periodically receive credits in connection with the acquisition of aircraft and engines. These credits are deferred until the aircraft and engines are delivered, and then applied as a reduction to the cost of the related equipment. Maintenance Costs We record maintenance costs to aircraft maintenance materials and outside repairs. Maintenance costs are expensed as incurred, except for costs incurred under power-by-the-hour contracts, which are expensed based on actual hours flown. Power-by-the-hour contracts transfer certain risk to third-party service providers and fix the amount we pay per flight hour to the service provider in exchange for maintenance and repairs under a predefined maintenance program. Modifications that enhance the operating performance or extend the useful lives of airframes or engines are capitalized and amortized over the remaining estimated useful life of the asset or the remaining lease term, whichever is shorter. Advertising Costs We expense advertising costs in passenger commissions and other selling expenses in the year incurred. Advertising expense was approximately $225 million for the years ended December 31, 2015, 2014 and 2013, respectively. Commissions Passenger sales commissions are recognized in operating expense when the related revenue is recognized. |
Fair Value Measurements |
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Fair Value Disclosures [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Fair Value Measurements | FAIR VALUE MEASUREMENTS Fair value is defined as an exit price, representing the amount that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants. Fair value is a market-based measurement that is determined based on assumptions that market participants would use in pricing an asset or liability.
Assets and liabilities measured at fair value are based on the valuation techniques identified in the tables below. The valuation techniques are as follows:
Assets (Liabilities) Measured at Fair Value on a Recurring Basis(1)
Cash Equivalents and Restricted Cash Equivalents and Investments. Cash equivalents generally consist of money market funds. Restricted cash equivalents and investments generally consist of money market funds and time deposits, which primarily support letters of credit that relate to certain projected self-insurance obligations and airport commitments. The fair value of these investments is based on a market approach using prices and other relevant information generated by market transactions involving identical or comparable assets. Short-Term Investments. The fair values of short-term investments are based on a market approach using industry standard valuation techniques that incorporate observable inputs such as quoted market prices, interest rates, benchmark curves, credit ratings of the security and other observable information. Long-Term Investments. Our long-term investments that are measured at fair value primarily consist of equity investments in Grupo Aeroméxico, the parent company of Aeroméxico, and GOL Linhas Aéreas Inteligentes, the parent company of VRG Linhas Aéreas (operating as GOL). Shares of the parent companies of Aeroméxico and GOL are traded on public exchanges and we have valued our investments based on quoted market prices. The investments are classified in other noncurrent assets. Hedge Derivatives. A portion of our derivative contracts are negotiated over-the-counter with counterparties without going through a public exchange. Accordingly, our fair value assessments give consideration to the risk of counterparty default (as well as our own credit risk). Such contracts are classified as Level 2 within the fair value hierarchy. The remainder of our hedge contracts are comprised of futures contracts, which are traded on a public exchange. These contracts are classified within Level 1 of the fair value hierarchy.
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Investments |
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Investments, Debt and Equity Securities [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Investments | INVESTMENTS Short-Term Investments The estimated fair values of short-term investments, which approximate cost at December 31, 2015, are shown below by contractual maturity. Actual maturities may differ from contractual maturities because issuers of the securities may have the right to retire our investments without prepayment penalties.
Long-Term Investments We have developed strategic relationships with certain airlines through equity investments and other forms of cooperation and support. These strategic relationships are important to us as they improve coordination with these airlines and enable our customers to seamlessly reach more destinations.
GOL’s financial performance is closely linked with the Brazilian economy, which has recently experienced GDP contraction, high inflation and a weakening of the Brazilian Real. These challenges and GOL’s recent financial performance have caused the fair value of our investment in GOL’s parent company shares to decline to $21 million with the $84 million loss recorded in AOCI at December 31, 2015. As GOL’s shares have traded below our cost basis for the majority of the last year, we evaluated whether the investment was other-than-temporarily impaired. We considered the recent conditions and outlook for both GOL and the broader Brazilian economy and the nature of our investment in GOL. As a result, we determined that the investment was not impaired as GOL’s management is implementing plans to maximize operational and network efficiency and control costs, which we anticipate will improve GOL’s financial performance. In addition, similar to our investments in other international airlines, GOL is a strategic investment for Delta, which operates as an extension of our global network. We have the intent and ability to hold our investment in GOL for a period of time sufficient to allow for the recovery of its market value.
We have, however, evaluated whether the recent decline in the value of China Eastern's shares would impair our investment. We considered the recent conditions and outlook for both China Eastern and the broader Chinese economy, as well as the nature of our investment in China Eastern. As a result, we determined that the investment was not impaired as the share price decline primarily results from turmoil in the Chinese equity markets and is not specific to China Eastern's financial performance. In addition, similar to our investments in other international airlines, China Eastern is a strategic investment for Delta, which operates as an extension of our global network. We have the intent and ability to hold our investment in China Eastern for a period of time sufficient to allow for the recovery of its market value. Equity Method Investment Virgin Atlantic. In June 2013, we purchased a non-controlling 49% equity stake in Virgin Atlantic Limited, the parent company of Virgin Atlantic Airways, for $360 million. In addition, effective January 1, 2014 we began an antitrust immunized joint venture with Virgin Atlantic, which allows for joint marketing and sales, coordinated pricing and revenue management, network planning and scheduling and other coordinated activities with respect to operations on routes between North America and the United Kingdom. As a result of this relationship, our customers have increased access and frequencies to London's Heathrow airport from points in the U.S., primarily from our hub at New York's JFK airport. We account for the investment under the equity method of accounting and recognize our portion of Virgin Atlantic's financial results in other expense in our Consolidated Statements of Operations. As part of the equity method of accounting, we allocated the investment in Virgin Atlantic to (1) our portion of their equity, (2) adjustments in the fair market value of assets and liabilities and (3) implied goodwill. |
Derivatives and Risk Management |
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Derivatives and Risk Management | DERIVATIVES AND RISK MANAGEMENT Changes in aircraft fuel prices, interest rates and foreign currency exchange rates impact our results of operations. In an effort to manage our exposure to these risks, we enter into derivative contracts and adjust our derivative portfolio as market conditions change. Aircraft Fuel Price Risk Changes in aircraft fuel prices materially impact our results of operations. We actively manage our fuel price risk through a hedging program intended to reduce the financial impact from changes in the price of jet fuel. We utilize different contract and commodity types in this program and frequently test their economic effectiveness against our financial targets. We closely monitor the hedge portfolio and rebalance the portfolio based on market conditions, which may result in locking in gains or losses on hedge contracts prior to their settlement dates. During the years ended December 31, 2015 and 2014, we recorded fuel hedge losses of $741 million and $2.0 billion, respectively. During 2015, we effectively deferred settlement of a portion of our hedge portfolio until 2016 by entering into fuel derivative transactions that, excluding market movements from the date of inception, would settle and provide approximately $300 million in cash receipts during the second half of 2015 and require approximately $300 million in cash payments in 2016. By effectively deferring settlement of a portion of the original derivative transactions, the restructured hedge portfolio provided additional time for the fuel market to stabilize. We early terminated certain of these deferral transactions in 2015. As a result, we reported $429 million in cash receipts and $71 million in cash payments associated with these deferral transactions as cash flows from financing activities on our Consolidated Statement of Cash Flows for the year ended December 31, 2015. Due to the continued volatility in the fuel market, during January and February 2016, we entered into additional deferral transactions to further defer settlement of a portion of our hedge portfolio until 2017. These deferral transactions, excluding market movements from the date of inception, will settle and provide approximately $300 million in cash receipts during the second half of 2016 and require approximately $300 million in cash payments in 2017. We will report the cash receipts and cash payments associated with these deferral transactions as cash flows from financing activities on our Consolidated Statements of Cash Flows. During the December 2015 quarter, we entered into hedges designed to offset and effectively terminate our existing hedge positions for the March 2016 quarter. In January 2016, we continued this process for substantially all of our positions with contract settlement dates through December 31, 2016. As a result, we have both neutralized our hedge portfolio and locked in cash payments of approximately $725 million in 2016, including the deferral transactions discussed above. Interest Rate Risk Our exposure to market risk from adverse changes in interest rates is primarily associated with our long-term debt obligations. Market risk associated with our fixed and variable rate long-term debt relates to the potential reduction in fair value and negative impact to future earnings, respectively, from an increase in interest rates. In an effort to manage our exposure to the risk associated with our variable rate long-term debt, we periodically enter into interest rate swaps. We designate interest rate contracts used to convert the interest rate exposure on a portion of our debt portfolio from a floating rate to a fixed rate as cash flow hedges, while those contracts converting our interest rate exposure from a fixed rate to a floating rate are designated as fair value hedges. During 2014, we terminated our remaining interest rate swap agreements designated as cash flow hedges in connection with the extinguishment of the underlying debt. We also have exposure to market risk from adverse changes in interest rates associated with our cash and cash equivalents and benefit plan obligations. Market risk associated with our cash and cash equivalents relates to the potential decline in interest income from a decrease in interest rates. Pension, postretirement, postemployment and worker's compensation obligation risk relates to the potential increase in our future obligations and expenses from a decrease in interest rates used to discount these obligations. Foreign Currency Exchange Rate Risk We are subject to foreign currency exchange rate risk because we have revenue and expense denominated in foreign currencies with our primary exposures being the Japanese yen and Canadian dollar. To manage exchange rate risk, we execute both our international revenue and expense transactions in the same foreign currency to the extent practicable. From time to time, we may also enter into foreign currency option and forward contracts. These foreign currency exchange contracts are designated as cash flow hedges. During 2014, we restructured certain foreign currency exchange contracts by re-hedging exposures at current market levels, resulting in an unrealized gain of $150 million. The gain on these contracts was recognized during 2015 in accordance with their original contract settlement dates. Hedge Position as of December 31, 2015
Hedge Position as of December 31, 2014
Offsetting Assets and Liabilities We have master netting arrangements with all of our counterparties giving us the right of setoff. We have elected not to offset the fair value positions recorded on our Consolidated Balance Sheets. The following table shows the potential net fair value positions had we elected to offset.
Designated Hedge Gains (Losses) Gains (losses) related to our designated hedge contracts during the years ended December 31, 2015, 2014 and 2013 are as follows:
As of December 31, 2015, we have recorded $75 million of net gains on cash flow hedge contracts in AOCI, which are scheduled to settle and be reclassified into earnings within the next 12 months. Credit Risk To manage credit risk associated with our aircraft fuel price, interest rate and foreign currency hedging programs, we evaluate counterparties based on several criteria including their credit ratings and limit our exposure to any one counterparty. Our hedge contracts contain margin funding requirements. The margin funding requirements may cause us to post margin to counterparties or may cause counterparties to post margin to us as market prices in the underlying hedged items change. Due to the fair value position of our hedge contracts, we posted margin of $119 million and $925 million as of December 31, 2015 and 2014, respectively. Our accounts receivable are generated largely from the sale of passenger airline tickets and cargo transportation services, the majority of which are processed through major credit card companies. We also have receivables from the sale of mileage credits under our SkyMiles Program to participating airlines and non-airline businesses such as credit card companies, hotels and car rental agencies. The credit risk associated with our receivables is minimal. Self-Insurance Risk We self-insure a portion of our losses from claims related to workers' compensation, environmental issues, property damage, medical insurance for employees and general liability. Losses are accrued based on an estimate of the aggregate liability for claims incurred, using independent actuarial reviews based on standard industry practices and our historical experience. |
Intangible Assets |
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Goodwill and Intangible Assets Disclosure [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Intangible Assets | INTANGIBLE ASSETS Indefinite-Lived Intangible Assets
International Routes and Slots. Our international routes and slots primarily relate to Pacific route authorities and slots at Tokyo-Narita and London-Heathrow airports. During the December 2015 quarter, we acquired six London-Heathrow slot pairs for $276 million we previously leased from Air France-KLM. Domestic Slots. Our domestic slots relate to our slots at New York-LaGuardia and Washington-Reagan National airports. Changes to our operations could result in an impairment charge or a change from indefinite-lived to definite-lived in the period in which the changes occur or are projected to occur. Definite-Lived Intangible Assets
Amortization expense was $18 million, $55 million and $70 million for the years ended December 31, 2015, 2014 and 2013, respectively. We estimate that we will incur approximately $17 million of amortization expense annually through 2020. |
Long-Term Debt |
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Debt Disclosure [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Long-Term Debt | LONG-TERM DEBT The following table summarizes our long-term debt:
2015 Debt Refinancing Transaction In connection with the retirement and termination of the outstanding loans under our existing Senior Secured Credit Facilities ("2011 Credit Facilities"), in the September 2015 quarter, we issued new debt consisting of the new Senior Secured Credit Facilities ("2015 Credit Facilities"), described below, and the 2015-1 pass through certificates ("2015-1 EETC"). 2015 Credit Facilities During 2015, we entered into the 2015 Credit Facilities to borrow up to $2.0 billion. The 2015 Credit Facilities consist of a $1.5 billion first-lien revolving credit facility (the “Revolving Credit Facility”) and a $500 million first-lien term loan facility (the “Term Loan Facility”). These transactions coincided with the retirement of $1.3 billion from the 2011 Term Loan Facility and $1.2 billion from the 2011 Revolving Credit Facility. 2015-1 EETC The details of the 2015-1 EETC, which is secured by 15 aircraft, are shown in the table below:
Key Financial Covenants 2015 Credit Facilities. Our obligations under the 2015 Credit Facilities are secured by liens on certain of our and the Guarantors’ assets, including accounts receivable, aircraft, spare engines, non-Pacific international routes, domestic slots and certain investment property. These assets also secure $187 million of certain fuel hedging obligations on a pari passu basis (i.e., on equal priority) with the Revolving Credit Facility and the Term Loan Facility. The 2015 Credit Facilities include affirmative, negative and financial covenants that may restrict our ability to, among other things, make investments, sell or otherwise dispose of assets if not in compliance with the collateral coverage ratio tests, pay dividends or repurchase stock. These covenants require us to maintain:
Under the 2015 Credit Facilities, if the Minimum Collateral Coverage Ratio is not maintained, we must either provide additional collateral to secure our obligations, or we must reduce the secured obligations under the facilities by an amount necessary to maintain compliance with the collateral coverage ratio. The 2015 Credit Facilities contain events of default customary for similar financings, including cross-defaults to other material indebtedness and certain change of control events. Upon the occurrence of an event of default, the outstanding obligations under the 2015 Credit Facilities may be accelerated and become due and payable immediately. Pacific Facilities. Our obligations under the Pacific Facilities are secured by a first lien on our Pacific route authorities and certain related assets. The Pacific Facilities include affirmative, negative and financial covenants that could restrict our ability to, among other things, make investments, sell or otherwise dispose of collateral if we are not in compliance with the collateral coverage ratio tests described below, pay dividends or repurchase stock.
We were in compliance with the covenants on our financing agreements at December 31, 2015. Availability Under Revolving Credit Facilities The table below shows availability under revolving credit facilities, all of which were undrawn, as of December 31, 2015:
Future Maturities The following table summarizes scheduled maturities of our debt for the years succeeding December 31, 2015:
Fair Value of Debt Market risk associated with our fixed- and variable-rate long-term debt relates to the potential reduction in fair value and negative impact to future earnings, respectively, from an increase in interest rates. The fair value of debt, shown below, is based primarily on reported market values, recently completed market transactions and estimates based on interest rates, maturities, credit risk and underlying collateral. Long-term debt is principally classified as Level 2 within the fair value hierarchy.
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Lease Obligations |
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Lease Obligations | LEASE OBLIGATIONS We lease aircraft, airport terminals, maintenance facilities, ticket offices and other property and equipment from third parties. Rental expense for operating leases, which is recorded on a straight-line basis over the life of the lease term, totaled $1.2 billion for the years ended December 31, 2015 and 2014 and $1.1 billion for the year ended December 31, 2013. Amounts due under capital leases are recorded as liabilities, while assets acquired under capital leases are recorded as property and equipment. Amortization of assets recorded under capital leases is included in depreciation and amortization expense. Our airport terminal leases include contingent rents, which vary based upon facility usage, enplanements, aircraft weight and other factors. Many of our aircraft, facility and equipment leases include rental escalation clauses and/or renewal options. Our leases do not include residual value guarantees and we are not the primary beneficiary in or have other forms of variable interest with the lessor of the leased assets. As a result, we have not consolidated any of the entities that lease to us. The following tables summarize our minimum rental commitments under capital leases and noncancelable operating leases (including certain aircraft flown by regional carriers) with initial or remaining terms in excess of one year for the years succeeding December 31, 2015: Capital Leases
Operating Leases
JFK Construction Obligation In 2015, we completed our redevelopment project at New York-JFK's Terminal 4 to facilitate convenient connections for our passengers and improve coordination with our SkyTeam alliance partners. Terminal 4 is operated by JFK International Air Terminal LLC (“IAT”), a private party, under its lease with the Port Authority of New York and New Jersey (“Port Authority”). In December 2010, we entered into a 33-year agreement with IAT (“Sublease”) to sublease space in Terminal 4. Also, in 2010, the Port Authority issued approximately $800 million principal amount of special project bonds to fund the majority of the project. We managed the project and bore the construction risk, including cost overruns. We recorded an asset for project costs (e.g., design, permitting, labor and other general construction costs), regardless of funding source, and a construction obligation equal to project costs funded by parties other than us. Our rental payments reduce the construction obligation and result in the recording of interest expense, calculated using the effective interest method. As of December 31, 2015, we have recorded $748 million as a fixed asset and a related construction obligation, respectively. We have an equity-method investment in the entity which owns IAT, our sublessor at Terminal 4. The Sublease requires us to pay certain fixed management fees. We determined the investment is a variable interest entity and assessed whether we have a controlling financial interest in IAT. Our rights under the Sublease, with respect to management of Terminal 4, are consistent with rights granted to an anchor tenant under a standard airport lease. Accordingly, we do not consolidate the entity in which we have an investment in our Consolidated Financial Statements. |
American Express Relationship |
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American Express Relationship [Abstract] | |
American Express Relationship | AMERICAN EXPRESS RELATIONSHIP General. Our agreements with American Express provide for joint marketing, grant certain benefits to Delta-American Express Cardholders and American Express Membership Rewards Program participants and allow American Express to market using our customer database. Cardholders earn mileage credits for making purchases using co-branded cards, may check their first bag for free, are granted access to Delta Sky Club lounges and receive other benefits while traveling on Delta. During the December 2014 quarter, we amended our agreements with American Express resulting in a modification of the terms of these agreements. The multi-year extended agreements became effective January 1, 2015. Previously, during 2013, we amended our agreements with American Express, which modified the products and services provided under the agreements. The amendments changed certain mileage award redemptions and access to Sky Clubs, among other things. For a description of how these amendments changed our accounting, see Note 1 under Frequent Flyer Program. Annual Sale of Unrestricted SkyMiles. In December 2011, we amended our American Express agreements to sell to American Express $675 million of unrestricted SkyMiles in each of the four years ending December 31, 2014. The December 2011 amendment also extended the period over which Cardholders could check their first bag for free on Delta flights. The SkyMiles purchased pursuant to the December 2011 amendment could have been used immediately by American Express. The usage of these SkyMiles was not restricted in any way. These annual purchases of SkyMiles were recorded as deferred revenue within current liabilities. The portion of each purchase of SkyMiles related to mileage credits redeemable for future travel was classified within frequent flyer deferred revenue and the portion related to the marketing component was classified within other accrued liabilities. The December 2011 amendment did not change the number of miles that we expected American Express to purchase from us over the four-year period; it only impacted the timing of those purchases. Fuel Card Obligation. We have a purchasing card with American Express for the purpose of buying jet fuel and crude oil. The card currently carries a maximum credit limit of $612 million and must be paid monthly. At December 31, 2015 and December 31, 2014, we had $221 million and $561 million, respectively, outstanding on this purchasing card, which was classified as a fuel card obligation within other accrued liabilities. |
Employee Benefit Plans |
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Defined Benefit Pension Plans and Defined Benefit Postretirement Plans Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Employee Benefit Plans | EMPLOYEE BENEFIT PLANS We sponsor defined benefit and defined contribution pension plans, healthcare plans and disability and survivorship plans for eligible employees and retirees and their eligible family members. Defined Benefit Pension Plans. We sponsor defined benefit pension plans for eligible employees and retirees. These plans are closed to new entrants and frozen for future benefit accruals. The Pension Protection Act of 2006 allows commercial airlines to elect alternative funding rules (“Alternative Funding Rules”) for defined benefit plans that are frozen. Delta elected the Alternative Funding Rules under which the unfunded liability for a frozen defined benefit plan may be amortized over a fixed 17-year period and is calculated using an 8.85% discount rate. We estimate our funding under these plans will total at least $1.0 billion in 2016, including $500 million of contributions above the minimum funding requirements. Defined Contribution Pension Plans. Delta sponsors several defined contribution plans. These plans generally cover different employee groups and employer contributions vary by plan. The cost associated with our defined contribution pension plans is shown in the Net Periodic Cost table below. Postretirement Healthcare Plans. We sponsor healthcare plans that provide benefits to eligible retirees and their dependents who are under age 65. We have generally eliminated company-paid post age 65 healthcare coverage, except for (1) subsidies available to a limited group of retirees and their dependents and (2) a group of retirees who retired prior to 1987. Benefits under these plans are funded from current assets and employee contributions. Postemployment Plans. We provide certain other welfare benefits to eligible former or inactive employees after employment but before retirement, primarily as part of the disability and survivorship plans. Substantially all employees are eligible for benefits under these plans in the event of death and/or disability. Benefit Obligations, Fair Value of Plan Assets and Funded Status
During 2015, net actuarial gains decreased our benefit obligation by $1.1 billion. This decrease is primarily due to the increase in discount rates from 2014 to 2015. These gains are recorded in AOCI and reflected in the table below. During 2014, net actuarial losses increased our benefit obligation by $3.3 billion. The increase in benefit obligation is primarily due to the decrease in discount rates from 2013 to 2014 and changes in life expectancy assumptions. These losses are recorded in AOCI and reflected in the table below. For additional information about life expectancy assumptions, see “Life Expectancy” below. A net actuarial loss of $231 million will be amortized from AOCI into net periodic benefit cost in 2016. Amounts are generally amortized from AOCI over the expected future lifetime of plan participants. Balance Sheet Position
Net Periodic Cost
Assumptions We used the following actuarial assumptions to determine our benefit obligations and our net periodic cost for the periods presented:
Healthcare Cost Trend Rate. Assumed healthcare cost trend rates have an effect on the amounts reported for the other postretirement benefit plans. A 1% change in the healthcare cost trend rate used in measuring the accumulated plan benefit obligation for these plans, which provide benefits to eligible retirees and their dependents who are under age 65, at December 31, 2015, would have the following effects:
Expected Long-Term Rate of Return. Our expected long-term rate of return on plan assets is based primarily on plan-specific investment studies using historical market return and volatility data. Modest excess return expectations versus some public market indices are incorporated into the return projections based on the actively managed structure of the investment programs and their records of achieving such returns historically. We also expect to receive a premium for investing in less liquid private markets. We review our rate of return on plan assets assumptions annually. Our annual investment performance for one particular year does not, by itself, significantly influence our evaluation. The investment strategy for our defined benefit pension plan assets is to earn a long-term return that meets or exceeds our annualized return target while taking an acceptable level of risk and maintaining sufficient liquidity to pay current benefits and other cash obligations of the plan. This is achieved by investing in a globally diversified mix of public and private equity, fixed income, real assets, hedge funds and other assets and instruments. Our expected long-term rate of return on assets for net periodic pension benefit cost for the year ended December 31, 2015 was 9%. Life Expectancy. We have historically utilized the Society of Actuaries' ("SOA") published mortality data in developing a best estimate of life expectancy. During 2014, the SOA published updated mortality tables for U.S. plans and an updated improvement scale, which both reflect improved longevity. Based on an evaluation of these new tables and our perspective of future longevity, we updated the mortality assumptions in 2014 for purposes of measuring pension and other postretirement and postemployment benefit obligations. The improvement in life expectancy increases our benefit obligations and future expense as benefit payments are paid over an extended period of time. In 2015, we reviewed the mortality assumptions and concluded that the assumptions used in 2014 continue to represent our best estimate of long-term life expectancy. We will continue to review our assumptions on an annual basis. Benefit Payments Benefit payments in the table below are based on the same assumptions used to measure the related benefit obligations. Actual benefit payments may vary significantly from these estimates. Benefits earned under our pension plans and certain postemployment benefit plans are expected to be paid from funded benefit plan trusts, while our other postretirement benefits are funded from current assets. The following table summarizes, the benefit payments that are scheduled to be paid in the years ending December 31:
Plan Assets We have adopted and implemented investment policies for our defined benefit pension plans that incorporate strategic asset allocation mixes intended to best meet the plans’ long-term obligations, while maintaining an appropriate level of risk and liquidity. These asset portfolios employ a diversified mix of investments, which are reviewed periodically. Active management strategies are utilized where feasible in an effort to realize investment returns in excess of market indices. Derivatives in the plans are primarily used to manage risk and gain asset class exposure while still maintaining liquidity. As part of these strategies, the plans are required to hold cash collateral associated with certain derivatives. Our investment strategies target a mix of 40-50% growth-seeking assets, 20-30% income-generating assets and 25-30% risk-diversifying assets. Risk diversifying assets include hedged mandates implementing long-short, market neutral and relative value strategies that invest primarily in publicly-traded equity, fixed income, foreign currency and commodity securities and derivatives and are used to improve the impact of active management on the plans. Benefit Plan Assets Measured at Fair Value on a Recurring Basis Benefit Plan Assets. Benefit plan assets relate to our defined benefit pension plans and certain of our postemployment benefit plans that are funded through trusts. The following table shows our benefit plan assets by asset class. These investments are presented net of the related benefit obligation in pension, postretirement and related benefits on the Consolidated Balance Sheets. See Note 2 for a description of the levels within the fair value hierarchy and associated valuation techniques used to measure fair value.
Equities and Equity-Related Instruments. Investments include common stock, commingled funds invested in common stock and equity-related instruments. Common stock is valued at the closing price reported on the active market on which the individual securities are traded. Commingled funds are valued using the net asset value divided by the number of shares outstanding, which is based on quoted market prices of the underlying assets owned by the fund. Equity-related instruments include investments in securities traded on exchanges, including listed futures and options, which are valued at the last reported sale prices on the last business day of the year or, if not available, the last reported bid prices. Over-the-counter securities are valued at the bid prices or the average of the bid and ask prices on the last business day of the year from published sources or, if not available, from other sources considered reliable, generally broker quotes. Fixed Income and Fixed Income-Related Instruments. Investments include corporate bonds, government bonds, collateralized mortgage obligations and other asset-backed securities. These investments are generally valued at the bid price or the average of the bid and ask price. Prices are based on pricing models, quoted prices of securities with similar characteristics or broker quotes. Fixed income-related instruments include investments in securities traded on exchanges, including listed futures and options, which are valued at the last reported sale prices on the last business day of the year or, if not available, the last reported bid prices. Over-the-counter securities are valued at the bid prices or the average of the bid and ask prices on the last business day of the year from published sources or, if not available, from other sources considered reliable, generally broker quotes. Private Equity and Real Assets. Real assets include real estate, energy, timberland and agriculture. The valuation of private equity and real assets requires significant judgment due to the absence of quoted market prices as well as the inherent lack of liquidity and the long-term nature of these assets. Investments are valued based on valuation models where one or more of the significant inputs into the model cannot be observed and which require the development of assumptions. We also assess the potential for adjustment to the fair value of these investments due to the lag in the availability of data. In these cases, we solicit preliminary valuation updates from the investment managers and use that information and corroborating data from public markets to determine any needed adjustments to estimate fair value. Hedge Funds. Our hedge fund investments are primarily made through shares of limited partnerships or similar structures for which a liquid secondary market does not exist. Hedge funds are primarily considered Level 3 assets. Hedge funds are typically valued monthly by third-party administrators that have been appointed by the funds' general partners. Cash Equivalents. These investments primarily consist of high-quality, short-term obligations that are a part of institutional money market mutual funds. The funds' market-based net asset value per share is calculated using current market quotations or an appropriate substitute that reflects current market conditions. Other. Primarily globally-diversified, risk-managed commingled funds consisting mainly of equity, fixed income and commodity exposures. Changes in Level 3. The following table shows the changes in our benefit plan assets classified in Level 3:
Other We also sponsor defined benefit pension plans for eligible employees in certain foreign countries. These plans did not have a material impact on our Consolidated Financial Statements in any period presented. Profit Sharing Program 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 program defines profit as pre-tax profit adjusted for profit sharing and certain other items. For years prior to 2016, our profit sharing program paid 10% to employees for the first $2.5 billion of annual profit and 20% of annual profit above $2.5 billion. For the years ended December 31, 2015, 2014 and 2013, we recorded expenses of $1.5 billion, $1.1 billion and $506 million under the profit sharing program, respectively. During the September 2015 quarter, we announced certain changes to employee compensation. Beginning with 2016 pre-tax profit (to be paid out in 2017), the profit sharing formula will be adjusted to pay 10% of annual pre-tax profit (as defined by the terms of the program) and, if we exceed our prior-year results, the program will pay 20% of the year-over-year increase in pre-tax profit to eligible employees. The profit sharing program for pilots remains unchanged and will continue in 2016 under its terms. |
Commitments and Contingencies |
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Commitments and Contingencies | COMMITMENTS AND CONTINGENCIES Aircraft Purchase and Lease Commitments At December 31, 2015, future aircraft purchase commitments totaled approximately $13.6 billion and included 70 B-737-900ER, 45 A321-200, 25 A330-900neo, 25 A350-900, 19 E190-100, 18 B-787-8 and six A330-300 aircraft. We have obtained, but are under no obligation to use, long-term financing commitments for a substantial portion of the purchase price of all of these aircraft, except for the 18 B-787-8 aircraft. Our purchase commitment for the 18 B-787-8 aircraft provides for certain aircraft substitution rights, including for our current orders of B-737-900ER aircraft.
In addition, we have agreements with Southwest Airlines and The Boeing Company to lease one additional B-717-200 aircraft, which will be delivered during the March 2016 quarter and completes the 88 B-717-200 aircraft we agreed to lease. Contract Carrier Agreements We have contract carrier agreements with regional carriers expiring from 2016 to 2024. Capacity Purchase Agreements. Most of our contract carriers operate for us under capacity purchase agreements. Under these agreements, the contract carriers operate some or all of their aircraft using our flight designator codes, and we control the scheduling, pricing, reservations, ticketing and seat inventories of those aircraft and retain the revenues associated with those flights. We pay those airlines an amount, as defined in the applicable agreement, which is based on a determination of their cost of operating those flights and other factors intended to approximate market rates for those services. The following table shows our minimum fixed obligations under our existing capacity purchase agreements with third-party regional carriers. The obligations set forth in the table contemplate minimum levels of flying by the contract carriers under the respective agreements and also reflect assumptions regarding certain costs associated with the minimum levels of flying such as the cost of fuel, labor, maintenance, insurance, catering, property tax and landing fees. Accordingly, our actual payments under these agreements could differ materially from the minimum fixed obligations set forth in the table below.
Revenue Proration Agreement. As of December 31, 2015, a portion of our contract carrier agreement with SkyWest Airlines, Inc. is structured as a revenue proration agreement. This revenue proration agreement establishes a fixed dollar or percentage division of revenues for tickets sold to passengers traveling on connecting flight itineraries. Contingencies Related to Termination of Shuttle America Agreements We have two capacity purchase agreements with Shuttle America, one that relates to its operation of Embraer 145s and one that relates to its operation of Embraer 170/175 aircraft. The Embraer 145 aircraft were operated by Chautauqua Airlines at December 31, 2014 and assigned with our consent to Shuttle America in January 2015. By providing required advance notice, we may terminate the Embraer 145 agreement and/or the Embraer 170/175 agreement without cause at any time. If we terminate either of the agreements without cause, Shuttle America has the right to (1) assign to us certain leased aircraft that the airline operates for us, provided we are able to continue the leases on the same terms the airline had prior to the assignment and (2) require us to purchase or lease certain of the aircraft the airline owns and operates for us at the time of the termination. If we are required to purchase aircraft owned by Shuttle America, the purchase price would be equal to the amount necessary to (1) reimburse Shuttle America for the equity it provided to purchase the aircraft and (2) repay in full any debt outstanding at such time that is not being assumed in connection with such purchase. If we are required to lease aircraft owned by Shuttle America, the lease would have (1) a rate equal to the aircraft-related debt payments of Shuttle America as if 90% of the aircraft was financed by Shuttle America and (2) other specified terms and conditions. Because these contingencies depend on our termination of the agreements without cause prior to their expiration dates, no obligation exists unless such termination occurs. We estimate that the total fair values, determined as of December 31, 2015, of the aircraft Shuttle America could assign to us or require that we purchase if we terminate without cause our contract carrier agreements are approximately $90 million with respect to the Embraer 145 aircraft and $184 million with respect to the Embraer 170/175 aircraft. The actual amount we may be required to pay in these circumstances may be materially different from these estimates. If Shuttle America exercises this right, we must also pay Shuttle America 10% interest (compounded monthly) on the equity it provided when it purchased the aircraft. Venezuelan Currency Devaluation During the December 2015 quarter, we devalued the unrestricted cash held in Venezuela based upon the prevailing market exchange rate of 200 bolivars per U.S. dollar as we will not be able to repatriate those funds at the previous original exchange rate. As a result of the devaluation, we recorded a $72 million charge in miscellaneous, net within non-operating expense, related to sales in 2013 and 2014. As of December 31, 2015, the remaining balance of Venezuelan bolivars recorded in unrestricted cash on our Consolidated Balance Sheet is de minimis. We now only accept U.S. dollars as payment for tickets on Venezuela flights. Legal Contingencies We are involved in various legal proceedings related to employment practices, environmental issues, antitrust matters and other matters concerning our business. We record liabilities for losses from legal proceedings when we determine that it is probable that the outcome in a legal proceeding will be unfavorable and the amount of loss can be reasonably estimated. Although the outcome of the legal proceedings in which we are involved cannot be predicted with certainty, management believes that the resolution of current matters will not have a material adverse effect on our Consolidated Financial Statements. Credit Card Processing Agreements Our VISA/MasterCard and American Express credit card processing agreements provide that no cash reserve ("Reserve") is required, and no withholding of payment related to receivables collected will occur, except in certain circumstances, including when we do not maintain a required level of liquidity as outlined in the merchant processing agreements. In circumstances in which the credit card processor can establish a Reserve or withhold payments, the amount of the Reserve or payments that may be withheld would be equal to the potential liability of the credit card processor for tickets purchased with VISA/MasterCard or American Express credit cards, as applicable, that had not yet been used for travel. We did not have a Reserve or an amount withheld as of December 31, 2015 and 2014. Other Contingencies General Indemnifications We are the lessee under many commercial real estate leases. It is common in these transactions for us, as the lessee, to agree to indemnify the lessor and the lessor's related parties for tort, environmental and other liabilities that arise out of or relate to our use or occupancy of the leased premises. This type of indemnity would typically make us responsible to indemnified parties for liabilities arising out of the conduct of, among others, contractors, licensees and invitees at, or in connection with, the use or occupancy of the leased premises. This indemnity often extends to related liabilities arising from the negligence of the indemnified parties, but usually excludes any liabilities caused by either their sole or gross negligence or their willful misconduct. Our aircraft and other equipment lease and financing agreements typically contain provisions requiring us, as the lessee or obligor, to indemnify the other parties to those agreements, including certain of those parties' related persons, against virtually any liabilities that might arise from the use or operation of the aircraft or other equipment. We believe that our insurance would cover most of our exposure to liabilities and related indemnities associated with the commercial real estate leases and aircraft and other equipment lease and financing agreements described above. While our insurance does not typically cover environmental liabilities, we have certain insurance policies in place as required by applicable environmental laws. Certain of our aircraft and other financing transactions include provisions that require us to make payments to preserve an expected economic return to the lenders if that economic return is diminished due to certain changes in law or regulations. In certain of these financing transactions, we also bear the risk of certain changes in tax laws that would subject payments to non-U.S. lenders to withholding taxes. We cannot reasonably estimate our potential future payments under the indemnities and related provisions described above because we cannot predict (1) when and under what circumstances these provisions may be triggered and (2) the amount that would be payable if the provisions were triggered because the amounts would be based on facts and circumstances existing at such time. Employees Under Collective Bargaining Agreements At December 31, 2015, we had approximately 83,000 full-time equivalent employees. Approximately 18% of these employees were represented by unions. The following table shows our domestic airline employee groups that are represented by unions.
In addition, 209 refinery employees of Monroe are represented by the United Steel Workers under an agreement that expires on February 28, 2019. This agreement is governed by the National Labor Relations Act, which generally allows either party to engage in self help upon the expiration of the agreement. Other We have certain contracts for goods and services that require us to pay a penalty, acquire inventory specific to us or purchase contract-specific equipment, as defined by each respective contract, if we terminate the contract without cause prior to its expiration date. Because these obligations are contingent on our termination of the contract without cause prior to its expiration date, no obligation would exist unless such a termination occurs. |
Income Taxes |
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Income Taxes | INCOME TAXES Income Tax (Provision) Benefit Our income tax (provision) benefit consisted of the following:
The following table presents the principal reasons for the difference between the effective tax rate and the U.S. federal statutory income tax rate:
Deferred Taxes Deferred income taxes reflect the net tax effect of temporary differences between the carrying amounts of assets and liabilities for financial reporting and income tax purposes. The following table shows significant components of our deferred tax assets and liabilities:
At December 31, 2015, we had $379 million of federal alternative minimum tax credit carryforwards, which do not expire, and $9.5 billion of federal pre-tax net operating loss carryforwards, which will not begin to expire until 2024. Valuation Allowance We periodically assess whether it is more likely than not that we will generate sufficient taxable income to realize our deferred income tax assets. We establish valuation allowances if it is not likely we will realize our deferred income tax assets. In making this determination, we consider all available positive and negative evidence and make certain assumptions. We consider, among other things, projected future taxable income, scheduled reversals of deferred tax liabilities, the overall business environment, our historical financial results and tax planning strategies. We recorded a full valuation allowance in 2004 due to our cumulative loss position at that time, compounded by the negative industry-wide business trends and outlook. At December 31, 2013, we released substantially all of the valuation allowance against our net deferred tax assets, resulting in an $8.3 billion benefit in our provision for income taxes. During 2014 and 2015, we continued our trend of sustained profitability. After considering all available positive and negative evidence, we released additional valuation allowances related to net operating losses and capital loss carryovers in each of those years. As a result, at December 31, 2014 and 2015, we retained valuation allowances of $46 million and $56 million, respectively, primarily related to state net operating losses, state credits and unrealized losses on investments, which have limited expiration periods. The following table shows the balance of our valuation allowance and the associated activity:
Income Tax Allocation We consider all income sources, including other comprehensive income, in determining the amount of tax benefit allocated to continuing operations. At the end of 2013, we released our tax valuation allowance, as discussed above, and settled all of our fuel derivatives designated as accounting hedges. As a result, an income tax benefit of $1.9 billion related to our valuation allowance release and an income tax expense of $321 million related to settlement of our fuel derivative was recognized in our Consolidated Statement of Operations for the year ended December 31, 2013. Income tax expense of $1.9 billion remains in AOCI, primarily related to pension obligations. This tax expense will not be recognized in net income until the pension obligations are fully extinguished. Uncertain Tax Positions The amount of, and changes to, our uncertain tax positions were not material in any of the years presented. The amount of unrecognized tax benefits at December 31, 2015, 2014 and 2013 was $32 million, $40 million and $37 million, respectively. We accrue interest and penalties related to unrecognized tax benefits in interest expense and operating expense, respectively. Interest and penalties are not material in any period presented. We are currently under audit by the IRS for the 2015, 2014 and 2013 tax years. |
Equity and Equity Compensation |
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Dec. 31, 2015 | |
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | |
Equity and Equity Compensation | EQUITY AND EQUITY COMPENSATION Equity We are authorized to issue 2.0 billion shares of capital stock, of which up to 1.5 billion may be shares of common stock, par value $0.0001 per share, and up to 500 million may be shares of preferred stock. Preferred Stock. We may issue preferred stock in one or more series. The Board of Directors is authorized (1) to fix the descriptions, powers (including voting powers), preferences, rights, qualifications, limitations and restrictions with respect to any series of preferred stock and (2) to specify the number of shares of any series of preferred stock. We have not issued any preferred stock. Treasury Stock. We generally withhold shares of Delta common stock to cover employees' portion of required tax withholdings when employee equity awards are issued or vest. These shares are valued at cost, which equals the market price of the common stock on the date of issuance or vesting. The weighted average cost of shares held in treasury was $17.70 and $15.82 as of December 31, 2015 and 2014, respectively. Equity-Based Compensation Our broad-based equity and cash compensation plan provides for grants of restricted stock, stock options, performance awards, including cash incentive awards and other equity-based awards (the "2007 Plan"). Shares of common stock issued under the 2007 Plan may be made available from authorized, but unissued, common stock or common stock we acquire. If any shares of our common stock are covered by an award that is canceled, forfeited or otherwise terminates without delivery of shares (including shares surrendered or withheld for payment of the exercise price of an award or taxes related to an award), such shares will again be available for issuance under the 2007 Plan. The 2007 Plan authorizes the issuance of up to 157 million shares of common stock. As of December 31, 2015, there were 27 million shares available for future grants. We make long-term incentive awards annually to eligible employees under the 2007 Plan. Generally, awards vest over time, subject to the employee's continued employment. Equity compensation expense for these awards is recognized in salaries and related costs over the employee's requisite service period (generally, the vesting period of the award) and totaled $76 million, $81 million and $90 million for the years ended December 31, 2015, 2014 and 2013, respectively. We record expense on a straight-line basis for awards with installment vesting. As of December 31, 2015, unrecognized costs related to unvested shares and stock options totaled $61 million. We expect substantially all unvested awards to vest. Restricted Stock. Restricted stock is common stock that may not be sold or otherwise transferred for a period of time and is subject to forfeiture in certain circumstances. The fair value of restricted stock awards is based on the closing price of the common stock on the grant date. As of December 31, 2015, there were 2.5 million unvested restricted stock awards. Stock Options. Stock options are granted with an exercise price equal to the closing price of Delta common stock on the grant date and generally have a 10-year term. We determine the fair value of stock options at the grant date using an option pricing model. As of December 31, 2015, there were 5.3 million outstanding stock option awards with a weighted average exercise price of $15.05, and 4.6 million were exercisable. Performance Shares. Performance shares are long-term incentive opportunities, which are payable in common stock and/or cash, and are generally contingent upon our achieving certain financial goals. Other. There was no tax benefit recognized in equity in 2015, 2014 or 2013 related to equity-based compensation as our excess tax benefits have not reduced taxes payable. Therefore, we will not recognize an income tax benefit related to equity compensation until we exhaust our net operating losses. |
Accumulated Other Comprehensive Loss |
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Accumulated Other Comprehensive Loss | ACCUMULATED OTHER COMPREHENSIVE LOSS The following table shows the components of accumulated other comprehensive loss:
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Segments & Geographic Information |
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Segment Reporting [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Segments & Geographic Information | SEGMENTS AND GEOGRAPHIC INFORMATION Operating segments are defined as components of an enterprise about which separate financial information is available that is evaluated regularly by the chief operating decision maker, or decision making group, and is used in resource allocation and performance assessments. Our chief operating decision maker is considered to be our executive leadership team. Our executive leadership team regularly reviews discrete information for our two operating segments, which are determined by the products and services provided: our airline segment and our refinery segment. Airline Segment Our airline segment is managed as a single business unit that provides scheduled air transportation for passengers and cargo throughout the U.S. and around the world and other ancillary airline services. This allows us to benefit from an integrated revenue pricing and route network. Our flight equipment forms one fleet, which is deployed through a single route scheduling system. When making resource allocation decisions, our chief operating decision maker evaluates flight profitability data, which considers aircraft type and route economics, but gives no weight to the financial impact of the resource allocation decision on an individual carrier basis. Our objective in making resource allocation decisions is to optimize our consolidated financial results. Refinery Segment In June 2012, our wholly-owned subsidiaries, Monroe Energy, LLC, and MIPC, LLC (collectively, “Monroe”), acquired the Trainer oil refinery and related assets located near Philadelphia, Pennsylvania for $180 million as part of our strategy to mitigate the cost of the refining margin reflected in the price of jet fuel. The acquisition included pipelines and terminal assets that allow the refinery to supply jet fuel to our airline operations throughout the Northeastern U.S., including our New York hubs at LaGuardia and JFK. Monroe received a $30 million grant from the Commonwealth of Pennsylvania. We accounted for the refinery acquisition as a business combination. The refinery, pipelines and terminal assets acquired were recorded at $180 million in property and equipment, net based on their respective fair values on the closing date of the transaction. Our refinery segment operates for the benefit of the airline segment by providing jet fuel to the airline segment from its own production and through jet fuel obtained through agreements with third parties. The refinery's production consists of jet fuel, as well as non-jet fuel products. We use several counterparties to exchange the non-jet fuel products produced by the refinery for jet fuel consumed in our airline operations. The gross fair value of the products exchanged under these agreements during the years ended December 31, 2015, 2014 and 2013 was $3.1 billion, $5.1 billion and $5.4 billion, respectively. Segment Reporting Segment results are prepared based on our internal accounting methods described below, with reconciliations to consolidated amounts in accordance with GAAP. Our segments are not designed to measure operating income or loss directly related to the products and services included in each segment on a stand-alone basis.
Geographic Information Operating revenue for the airline segment is recognized in a specific geographic region based on the origin, flight path and destination of each flight segment. The majority of the revenues of the refinery, consisting of fuel sales to the airline, have been eliminated in the Consolidated Financial Statements. The remaining operating revenue for the refinery segment is included in the domestic region. Our operating revenue by geographic region (as defined by the DOT) is summarized in the following table:
Our tangible assets consist primarily of flight equipment, which is mobile across geographic markets. Accordingly, assets are not allocated to specific geographic regions. |
Restructuring and Other Items |
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Restructuring and Other Items | RESTRUCTURING AND OTHER The following table shows amounts recorded in restructuring and other on our Consolidated Statements of Operations:
Fleet and Other. We continue to restructure our domestic fleet by replacing a portion of our 50-seat regional fleet with more efficient and customer preferred CRJ-900 and B-717-200 aircraft and replacing older, less cost effective B-757-200 aircraft with B-737-900ER aircraft. The restructuring charges recorded during 2015 include remaining lease payments and lease return costs for permanently grounded aircraft. In previous years, the restructuring charges also included impairments, the acceleration of aircraft depreciation and related equipment disposals. During 2014, we decided to retire our fleet of 16 B-747-400 aircraft over the next three years. As part of the accelerated retirement, we recorded an impairment charge for the owned and capital leased aircraft. This impairment charge was calculated using Level 3 fair value inputs based primarily upon recent market transactions and existing market conditions. Also, we recorded a lease restructuring charge for the three B-747-400 aircraft under operating leases that were retired during 2014. Severance and Related Costs. During 2015, we announced a voluntary retirement program for eligible U.S. employees and an involuntary merit restructuring initiative. We recognized a $51 million charge in salaries and related costs in our Consolidated Statement of Operations in connection with these programs. During 2014, we announced a voluntary retirement program for eligible U.S. employees. We recorded a $71 million charge in restructuring and other in our Consolidated Statement of Operations in connection with this program and other programs related to our Pacific strategy. Settlements. During 2014, we settled outstanding litigation resulting in a favorable settlement of $67 million and received an unrelated insurance settlement of $46 million. The following table shows the balances and activity for restructuring charges:
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Earnings Per Share |
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Earnings Per Share | EARNINGS PER SHARE We calculate basic earnings per share by dividing the net income by the weighted average number of common shares outstanding, excluding restricted shares. We calculate diluted earnings per share by dividing net income by the weighted average number of common shares outstanding plus the dilutive effect of outstanding share-based awards, including stock options and restricted stock awards. Antidilutive common stock equivalents excluded from the diluted earnings per share calculation are not material. The following table shows our computation of basic and diluted earnings per share:
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Quarterly Financial Data (Unaudited) |
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Quarterly Financial Information (Unaudited) | QUARTERLY FINANCIAL DATA (UNAUDITED) The following table summarizes our unaudited results of operations on a quarterly basis. The quarterly earnings (loss) per share amounts for a year will not add to the earnings per share for that year due to the weighting of shares used in calculating per share data.
Special Items
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Summary of Significant Accounting Policies (Policies) |
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Accounting Policies [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Basis of Presentation | Our Consolidated Financial Statements include the accounts of Delta Air Lines, Inc. and our wholly-owned subsidiaries and have been prepared in accordance with accounting principles generally accepted in the U.S. (“GAAP”). We do not consolidate the financial statements of any company in which we have an ownership interest of 50% or less. We are not the primary beneficiary of, nor do we have a controlling financial interest in, any variable interest entity. Accordingly, we have not consolidated any variable interest entity. We have marketing alliances with other airlines to enhance our access to domestic and international markets. These arrangements may include codesharing, reciprocal frequent flyer program benefits, shared or reciprocal access to passenger lounges, joint promotions, common use of airport gates and ticket counters, ticket office co-location and other marketing agreements. We have received antitrust immunity for certain marketing arrangements, which enables us to offer a more integrated route network and develop common sales, marketing and discount programs for customers. Some of our marketing arrangements provide for the sharing of revenues and expenses. Revenues and expenses associated with collaborative arrangements are presented on a gross basis in the applicable line items on our Consolidated Statements of Operations. |
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Use of Estimates | Use of Estimates We are required to make estimates and assumptions when preparing our Consolidated Financial Statements in accordance with GAAP. These estimates and assumptions affect the amounts reported in our Consolidated Financial Statements and the accompanying notes. Actual results could differ materially from those estimates. |
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Recent Accounting Standards | Recent Accounting Standards Revenue from Contracts with Customers In May 2014, the Financial Accounting Standards Board ("FASB") issued Accounting Standards Update ("ASU") No. 2014-09, "Revenue from Contracts with Customers." Under the new standard, revenue is recognized at the time a good or service is transferred to a customer for the amount of consideration received for that specific good or service. Entities may use a full retrospective approach or report the cumulative effect as of the date of adoption. In August 2015, the FASB issued ASU No. 2015-14, "Revenue from Contracts with Customers (Topic 606): Deferral of the Effective Date," that deferred the effective date by one year to December 15, 2017 for interim and annual reporting periods beginning after that date. The FASB permitted early adoption of the standard, but not before the original effective date of December 15, 2016. We are currently evaluating how the adoption of this standard will impact our Consolidated Financial Statements. Presentation of Debt Issuance Costs During 2015, the FASB issued ASU Nos. 2015-03 and 2015-15, related to simplifying the presentation of debt issuance costs. These standards amend existing guidance to require the presentation of debt issuance costs in the balance sheet as a deduction from the carrying amount of the related debt liability instead of as a deferred charge. It is effective for annual reporting periods beginning after December 15, 2015, but early adoption is permitted. We early adopted these standards in the December 2015 quarter, which we accounted for as a change in accounting principle and applied the guidance retrospectively. This change results in a reclassification of $32 million from prepaid expenses and other to current maturities of long-term debt and capital leases and $84 million from other noncurrent assets to long-term debt and capital leases as of December 31, 2014. Disclosures for Investments in Certain Entities That Calculate Net Asset Value per Share In May 2015, the FASB issued ASU No. 2015-07, "Disclosures for Investments in Certain Entities That Calculate Net Asset Value per Share (or Its Equivalent)." Under the new standard, investments for which fair value is measured at net asset value per share (or its equivalent) using the practical expedient will no longer be categorized in the fair value hierarchy. It is effective for interim and annual reporting periods beginning after December 15, 2015, but early adoption is permitted. We will adopt this standard effective January 1, 2016. We are currently assessing how the adoption of this standard will impact our Consolidated Financial Statements as our pension plan has a significant number of investments measured at net asset value. Balance Sheet Classification of Deferred Taxes In November 2015, the FASB issued ASU No. 2015-17, "Balance Sheet Classification of Deferred Taxes." This standard requires that deferred tax liabilities and assets be classified as noncurrent on the balance sheet. It is effective for interim and annual periods beginning after December 15, 2016, but early adoption is permitted. We early adopted this standard in the December 2015 quarter, which we accounted for as a change in accounting principle and applied the guidance retrospectively. This change results in the reclassification of $3.3 billion from current assets to deferred income taxes, net in other assets on our December 31, 2014 Consolidated Balance Sheet. Financial Instruments In January 2016, the FASB issued ASU No. 2016-01, "Financial Instruments—Overall (Subtopic 825-10)." This standard makes several modifications to Subtopic 825-10 including the elimination of the available-for-sale classification of equity investments, and requires equity investments with readily determinable fair values to be measured at fair value with changes in fair value recognized in net income. It is effective for interim and annual periods beginning after December 15, 2017. Our investments in the parent companies of Aeroméxico and GOL are currently accounted for as available-for-sale with changes in fair value recognized in other comprehensive income. At the time of adoption, any amounts in accumulated other comprehensive income/(loss) ("AOCI") related to equity investments would be reclassified to non-operating expense/income. As of December 31, 2015, a net unrealized loss of $66 million related to these investments was recorded in AOCI on our Consolidated Balance Sheet. |
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Cash and Cash Equivalents | Short-term, highly liquid investments with maturities of three months or less when purchased are classified as cash and cash equivalents. |
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Short-term Investments | Investments with maturities of greater than three months, but not in excess of one year, when purchased are classified as short-term investments. Investments with maturities beyond one year when purchased may be classified as short-term investments if they are expected to be available to support our short-term liquidity needs. All short-term investments are classified as either available-for-sale or held-to-maturity and realized gains and losses are recorded using the specific identification method. |
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Accounts Receivable | Accounts Receivable Accounts receivable primarily consist of amounts due from credit card companies from the sale of passenger airline tickets, customers of our aircraft maintenance and cargo transportation services and other companies for the purchase of mileage credits under our frequent flyer program (the "SkyMiles Program"). We provide an allowance for uncollectible accounts equal to the estimated losses expected to be incurred based on historical chargebacks, write-offs, bankruptcies and other specific analyses. Bad debt expense was not material in any period presented. |
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Inventories | Inventories Spare Parts. Inventories of expendable parts related to flight equipment, which cannot be economically repaired, reconditioned or reused after removal from the aircraft, are carried at moving average cost and charged to operations as consumed. An allowance for obsolescence is provided over the remaining useful life of the related fleet. We also provide allowances for parts identified as excess or obsolete to reduce the carrying costs to the lower of cost or net realizable value. These parts are assumed to have an estimated residual value of 5% of the original cost. Refinery. Refined product, feedstock and blendstock inventories, all of which are finished goods, are carried at recoverable cost. We use jet fuel produced by the refinery and procured through the exchange with third parties of gasoline, diesel and other refined products ("non-jet fuel products") the refinery produces in our airline operations. Cost is determined using the first-in, first-out method. Costs include the raw material consumed plus direct manufacturing costs (such as labor, utilities and supplies) as incurred and an applicable portion of manufacturing overhead. |
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Accounting for Refinery Related Buy/Sell Agreements | Accounting for Refinery Related Buy/Sell Agreements To the extent that we receive jet fuel for non-jet fuel products exchanged under buy/sell agreements, we account for these transactions as nonmonetary exchanges. We have recorded these nonmonetary exchanges at the carrying amount of the non-jet fuel products transferred within aircraft fuel and related taxes on the Consolidated Statements of Operations. |
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Derivatives | Derivatives Changes in aircraft fuel prices, interest rates and foreign currency exchange rates impact our results of operations. In an effort to manage our exposure to these risks, we enter into derivative contracts and adjust our derivative portfolio as market conditions change. We recognize derivative contracts at fair value on our Consolidated Balance Sheets. Not Designated as Accounting Hedges. We do not designate our fuel derivative contracts as accounting hedges. We record changes in the fair value of our fuel hedges in aircraft fuel and related taxes. These changes in fair value include settled gains and losses as well as mark-to-market adjustments ("MTM adjustments"). MTM adjustments are defined as fair value changes recorded in periods other than the settlement period. Such fair value changes are not necessarily indicative of the actual settlement value of the underlying hedge in the contract settlement period. Designated as Cash Flow Hedges. For derivative contracts designated as cash flow hedges (interest rate contracts and foreign currency exchange contracts), the effective portion of the gain or loss on the derivative is reported as a component of AOCI and reclassified into earnings in the same period in which the hedged transaction affects earnings. The effective portion of the derivative represents the change in fair value of the hedge that offsets the change in fair value of the hedged item. To the extent the change in the fair value of the hedge does not perfectly offset the change in the fair value of the hedged item, the ineffective portion of the hedge is immediately recognized in other expense. Designated as Fair Value Hedges. For derivative contracts designated as fair value hedges (interest rate contracts), the gain or loss on the derivative is reported in earnings and an equivalent amount is reflected as a change in the carrying value of long-term debt and capital leases, with an offsetting loss or gain recognized in current earnings. We include the gain or loss on the hedged item in the same account as the offsetting loss or gain on the related derivative contract, resulting in no impact to our Consolidated Statements of Operations. The following table summarizes the risk each type of derivative contract is hedging and the classification of related gains and losses on our Consolidated Statements of Operations:
The following table summarizes the accounting treatment of our derivative contracts:
We perform, at least quarterly, an assessment of the effectiveness of our derivative contracts designated as hedges, including assessing the possibility of counterparty default. If we determine that a derivative is no longer expected to be highly effective, we discontinue hedge accounting prospectively and recognize subsequent changes in the fair value of the hedge in earnings. We believe our derivative contracts that continue to be designated as hedges, consisting of interest rate and foreign currency exchange contracts, will continue to be highly effective in offsetting changes in fair value or cash flow, respectively, attributable to the hedged risk. Cash flows associated with purchasing and settling hedge contracts generally are classified as operating cash flows. However, if a hedge contract includes a significant financing element at inception, cash flows associated with the hedge contract are recorded as financing cash flows. Hedge Margin. In accordance with our fuel, interest rate and foreign currency hedge contracts, we may require counterparties to fund the margin associated with our gain position and/or counterparties may require us to fund the margin associated with our loss position on these contracts. The amount of the margin, if any, is periodically adjusted based on the fair value of the hedge contracts. The margin requirements are intended to mitigate a party's exposure to the risk of contracting party default. We do not offset margin funded to counterparties or margin funded to us by counterparties against fair value amounts recorded for our hedge contracts. The hedge margin we receive from counterparties is recorded in cash and cash equivalents or prepaid expenses and other, with the offsetting obligation in accounts payable. The hedge margin we provide to counterparties is recorded in hedge margin receivable. |
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Passenger Tickets | Passenger Tickets We record sales of passenger tickets in air traffic liability. Passenger revenue is recognized when we provide transportation or when the ticket expires unused, reducing the related air traffic liability. We periodically evaluate the estimated air traffic liability and record any adjustments in our Consolidated Statements of Operations. These adjustments relate primarily to refunds, exchanges, transactions with other airlines and other items for which final settlement occurs in periods subsequent to the sale of the related tickets at amounts other than the original sales price. |
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Revenue Recognition | Passenger Tickets We record sales of passenger tickets in air traffic liability. Passenger revenue is recognized when we provide transportation or when the ticket expires unused, reducing the related air traffic liability. We periodically evaluate the estimated air traffic liability and record any adjustments in our Consolidated Statements of Operations. These adjustments relate primarily to refunds, exchanges, transactions with other airlines and other items for which final settlement occurs in periods subsequent to the sale of the related tickets at amounts other than the original sales price. Passenger Taxes and Fees We are required to charge certain taxes and fees on our passenger tickets, including U.S. federal transportation taxes, federal security charges, airport passenger facility charges and foreign arrival and departure taxes. These taxes and fees are assessments on the customer for which we act as a collection agent. Because we are not entitled to retain these taxes and fees, we do not include such amounts in passenger revenue. We record a liability when the amounts are collected and reduce the liability when payments are made to the applicable government agency or operating carrier. Frequent Flyer Program Our SkyMiles Program offers incentives to travel on Delta. This program allows customers to earn mileage credits by flying on Delta, Delta Connection and airlines that participate in the SkyMiles Program, as well as through participating companies such as credit card companies, hotels and car rental agencies. We sell mileage credits to non-airline businesses, customers and other airlines. Effective January 1, 2015, the SkyMiles program was modified from a model in which customers earn redeemable mileage credits based on distance traveled to a model based on ticket price. This award change did not affect the way we account for the program. The SkyMiles Program includes two types of transactions that are considered revenue arrangements with multiple deliverables. As discussed below, these are (1) passenger ticket sales earning mileage credits and (2) the sale of mileage credits to participating companies with which we have marketing agreements. Mileage credits are a separate unit of accounting as they can be redeemed by customers in future periods for air travel on Delta and participating airlines, membership in our Sky Club and other program awards. Passenger Ticket Sales Earning Mileage Credits. Passenger ticket sales earning mileage credits under our SkyMiles Program provide customers with two deliverables: (1) mileage credits earned and (2) air transportation. We value each deliverable on a standalone basis. Our estimate of the selling price of a mileage credit is based on an analysis of our sales of mileage credits to other airlines and customers, which is re-evaluated at least annually. We use established ticket prices to determine the estimated selling price of air transportation. We allocate the total amount collected from passenger ticket sales between the deliverables based on their relative selling prices. We defer revenue for the mileage credits related to passenger ticket sales when the credits are earned and recognize it as passenger revenue when miles are redeemed and services are provided. We record the air transportation portion of the passenger ticket sales in air traffic liability and recognize these amounts in passenger revenue when we provide transportation or when the ticket expires unused. Sale of Mileage Credits. Customers may earn mileage credits through participating companies such as credit card companies, hotels and car rental agencies with which we have marketing agreements to sell mileage credits. Our contracts to sell mileage credits under these marketing agreements have multiple deliverables, as defined below. Our most significant contract to sell mileage credits relates to our co-brand credit card relationship with American Express. Our agreements with American Express provide for joint marketing, grant certain benefits to Delta-American Express co-branded credit card holders ("Cardholders") and American Express Membership Rewards Program participants and allow American Express to market using our customer database. Cardholders earn mileage credits for making purchases using co-branded cards, may check their first bag for free, are granted discounted access to Delta Sky Club lounges and receive other benefits while traveling on Delta. These benefits that we provide in the form of separate products and services under the SkyMiles agreements are referred to as "deliverables." Additionally, participants in the American Express Membership Rewards program may exchange their points for mileage credits under the SkyMiles Program. As a result, we sell mileage credits at agreed-upon rates to American Express for provision to their customers under the co-brand credit card program and the Membership Rewards program. In December 2014, we amended our marketing agreements with American Express which increased the value we receive under the agreements and extended the term to 2022. The amended agreements became effective January 1, 2015. The deliverables under the amended agreements are substantially similar to the previous agreement. We account for the amended agreements consistent with the accounting method adopted in September 2013 that allocates the consideration received to the individual products and services delivered based on their relative selling prices (discussed below). The increased value received under the amended agreements increases the amount of deferred revenue for the travel component and increases the value of the other deliverables, which are recognized in other revenue as they are provided. In September 2013, we modified our marketing agreements with American Express, which required us to change the accounting method for recording SkyMiles sold. Under the previous method, the embedded premium or discount was allocated to the residual products or services in a combined transaction. The new method allocates consideration received based on the relative selling price of each product or service. We determined our best estimate of the selling prices by considering discounted cash flow analysis using multiple inputs and assumptions, including: (1) the expected number of miles awarded and number of miles redeemed, (2) the rate at which we sell mileage credits to other airlines, (3) published rates on our website for baggage fees, discounted access to Delta Sky Club lounges and other benefits while traveling on Delta and (4) brand value. The impact of adopting the relative selling price method re-allocated a portion of the embedded discount to the travel component, lowering the deferral rate we use to record miles sold under the agreements and increasing revenue recognized on the remaining deliverables. We recognize revenue as we deliver each sales element. We defer the travel deliverable (mileage credits) as part of frequent flyer deferred revenue and recognize passenger revenue as the mileage credits are used for travel. The revenue allocated to the remaining deliverables is recorded in other revenue. We recognize the revenue for these services as they are performed. Breakage. For mileage credits that we estimate are not likely to be redeemed (“breakage”), we recognize the associated value proportionally during the period in which the remaining mileage credits are expected to be redeemed. Management uses statistical models to estimate breakage based on historical redemption patterns. A change in assumptions as to the period over which mileage credits are expected to be redeemed, the actual redemption activity for mileage credits or the estimated fair value of mileage credits expected to be redeemed could have a material impact on our revenue in the year in which the change occurs and in future years. Regional Carriers Revenue Our regional carriers include both our contract carrier agreements with third-party regional carriers ("contract carriers") and our wholly-owned subsidiary, Endeavor. In May 2013, Endeavor emerged from bankruptcy and we became its sole owner pursuant to a confirmed plan of reorganization. Our contract carrier agreements are structured as either (1) capacity purchase agreements where we purchase all or a portion of the contract carrier's capacity and are responsible for selling the seat inventory we purchase or (2) revenue proration agreements, which are based on a fixed dollar or percentage division of revenues for tickets sold to passengers traveling on connecting flight itineraries. We record revenue related to our contract carriers and Endeavor in regional carriers passenger revenue and the related expenses in regional carriers expense. Cargo Revenue Cargo revenue is recognized when we provide the transportation. Other Revenue Other revenue is primarily comprised of (1) the non-travel components of the sale of mileage credits discussed above, (2) baggage fee revenue, (3) other miscellaneous service revenue, including ticket change fees, (4) revenue from ancillary businesses, such as the aircraft maintenance and repair and staffing services we provide to third parties and (5) sales of non-jet fuel products to third parties by our oil refinery. |
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Frequent Flyer Program | Frequent Flyer Program Our SkyMiles Program offers incentives to travel on Delta. This program allows customers to earn mileage credits by flying on Delta, Delta Connection and airlines that participate in the SkyMiles Program, as well as through participating companies such as credit card companies, hotels and car rental agencies. We sell mileage credits to non-airline businesses, customers and other airlines. Effective January 1, 2015, the SkyMiles program was modified from a model in which customers earn redeemable mileage credits based on distance traveled to a model based on ticket price. This award change did not affect the way we account for the program. The SkyMiles Program includes two types of transactions that are considered revenue arrangements with multiple deliverables. As discussed below, these are (1) passenger ticket sales earning mileage credits and (2) the sale of mileage credits to participating companies with which we have marketing agreements. Mileage credits are a separate unit of accounting as they can be redeemed by customers in future periods for air travel on Delta and participating airlines, membership in our Sky Club and other program awards. Passenger Ticket Sales Earning Mileage Credits. Passenger ticket sales earning mileage credits under our SkyMiles Program provide customers with two deliverables: (1) mileage credits earned and (2) air transportation. We value each deliverable on a standalone basis. Our estimate of the selling price of a mileage credit is based on an analysis of our sales of mileage credits to other airlines and customers, which is re-evaluated at least annually. We use established ticket prices to determine the estimated selling price of air transportation. We allocate the total amount collected from passenger ticket sales between the deliverables based on their relative selling prices. We defer revenue for the mileage credits related to passenger ticket sales when the credits are earned and recognize it as passenger revenue when miles are redeemed and services are provided. We record the air transportation portion of the passenger ticket sales in air traffic liability and recognize these amounts in passenger revenue when we provide transportation or when the ticket expires unused. Sale of Mileage Credits. Customers may earn mileage credits through participating companies such as credit card companies, hotels and car rental agencies with which we have marketing agreements to sell mileage credits. Our contracts to sell mileage credits under these marketing agreements have multiple deliverables, as defined below. Our most significant contract to sell mileage credits relates to our co-brand credit card relationship with American Express. Our agreements with American Express provide for joint marketing, grant certain benefits to Delta-American Express co-branded credit card holders ("Cardholders") and American Express Membership Rewards Program participants and allow American Express to market using our customer database. Cardholders earn mileage credits for making purchases using co-branded cards, may check their first bag for free, are granted discounted access to Delta Sky Club lounges and receive other benefits while traveling on Delta. These benefits that we provide in the form of separate products and services under the SkyMiles agreements are referred to as "deliverables." Additionally, participants in the American Express Membership Rewards program may exchange their points for mileage credits under the SkyMiles Program. As a result, we sell mileage credits at agreed-upon rates to American Express for provision to their customers under the co-brand credit card program and the Membership Rewards program. In December 2014, we amended our marketing agreements with American Express which increased the value we receive under the agreements and extended the term to 2022. The amended agreements became effective January 1, 2015. The deliverables under the amended agreements are substantially similar to the previous agreement. We account for the amended agreements consistent with the accounting method adopted in September 2013 that allocates the consideration received to the individual products and services delivered based on their relative selling prices (discussed below). The increased value received under the amended agreements increases the amount of deferred revenue for the travel component and increases the value of the other deliverables, which are recognized in other revenue as they are provided. In September 2013, we modified our marketing agreements with American Express, which required us to change the accounting method for recording SkyMiles sold. Under the previous method, the embedded premium or discount was allocated to the residual products or services in a combined transaction. The new method allocates consideration received based on the relative selling price of each product or service. We determined our best estimate of the selling prices by considering discounted cash flow analysis using multiple inputs and assumptions, including: (1) the expected number of miles awarded and number of miles redeemed, (2) the rate at which we sell mileage credits to other airlines, (3) published rates on our website for baggage fees, discounted access to Delta Sky Club lounges and other benefits while traveling on Delta and (4) brand value. The impact of adopting the relative selling price method re-allocated a portion of the embedded discount to the travel component, lowering the deferral rate we use to record miles sold under the agreements and increasing revenue recognized on the remaining deliverables. We recognize revenue as we deliver each sales element. We defer the travel deliverable (mileage credits) as part of frequent flyer deferred revenue and recognize passenger revenue as the mileage credits are used for travel. The revenue allocated to the remaining deliverables is recorded in other revenue. We recognize the revenue for these services as they are performed. Breakage. For mileage credits that we estimate are not likely to be redeemed (“breakage”), we recognize the associated value proportionally during the period in which the remaining mileage credits are expected to be redeemed. Management uses statistical models to estimate breakage based on historical redemption patterns. A change in assumptions as to the period over which mileage credits are expected to be redeemed, the actual redemption activity for mileage credits or the estimated fair value of mileage credits expected to be redeemed could have a material impact on our revenue in the year in which the change occurs and in future years. |
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Deferred Revenue | Passenger Ticket Sales Earning Mileage Credits. Passenger ticket sales earning mileage credits under our SkyMiles Program provide customers with two deliverables: (1) mileage credits earned and (2) air transportation. We value each deliverable on a standalone basis. Our estimate of the selling price of a mileage credit is based on an analysis of our sales of mileage credits to other airlines and customers, which is re-evaluated at least annually. We use established ticket prices to determine the estimated selling price of air transportation. We allocate the total amount collected from passenger ticket sales between the deliverables based on their relative selling prices. We defer revenue for the mileage credits related to passenger ticket sales when the credits are earned and recognize it as passenger revenue when miles are redeemed and services are provided. We record the air transportation portion of the passenger ticket sales in air traffic liability and recognize these amounts in passenger revenue when we provide transportation or when the ticket expires unused. Sale of Mileage Credits. Customers may earn mileage credits through participating companies such as credit card companies, hotels and car rental agencies with which we have marketing agreements to sell mileage credits. Our contracts to sell mileage credits under these marketing agreements have multiple deliverables, as defined below. Our most significant contract to sell mileage credits relates to our co-brand credit card relationship with American Express. Our agreements with American Express provide for joint marketing, grant certain benefits to Delta-American Express co-branded credit card holders ("Cardholders") and American Express Membership Rewards Program participants and allow American Express to market using our customer database. Cardholders earn mileage credits for making purchases using co-branded cards, may check their first bag for free, are granted discounted access to Delta Sky Club lounges and receive other benefits while traveling on Delta. These benefits that we provide in the form of separate products and services under the SkyMiles agreements are referred to as "deliverables." Additionally, participants in the American Express Membership Rewards program may exchange their points for mileage credits under the SkyMiles Program. As a result, we sell mileage credits at agreed-upon rates to American Express for provision to their customers under the co-brand credit card program and the Membership Rewards program. In December 2014, we amended our marketing agreements with American Express which increased the value we receive under the agreements and extended the term to 2022. The amended agreements became effective January 1, 2015. The deliverables under the amended agreements are substantially similar to the previous agreement. We account for the amended agreements consistent with the accounting method adopted in September 2013 that allocates the consideration received to the individual products and services delivered based on their relative selling prices (discussed below). The increased value received under the amended agreements increases the amount of deferred revenue for the travel component and increases the value of the other deliverables, which are recognized in other revenue as they are provided. In September 2013, we modified our marketing agreements with American Express, which required us to change the accounting method for recording SkyMiles sold. Under the previous method, the embedded premium or discount was allocated to the residual products or services in a combined transaction. The new method allocates consideration received based on the relative selling price of each product or service. We determined our best estimate of the selling prices by considering discounted cash flow analysis using multiple inputs and assumptions, including: (1) the expected number of miles awarded and number of miles redeemed, (2) the rate at which we sell mileage credits to other airlines, (3) published rates on our website for baggage fees, discounted access to Delta Sky Club lounges and other benefits while traveling on Delta and (4) brand value. The impact of adopting the relative selling price method re-allocated a portion of the embedded discount to the travel component, lowering the deferral rate we use to record miles sold under the agreements and increasing revenue recognized on the remaining deliverables. We recognize revenue as we deliver each sales element. We defer the travel deliverable (mileage credits) as part of frequent flyer deferred revenue and recognize passenger revenue as the mileage credits are used for travel. The revenue allocated to the remaining deliverables is recorded in other revenue. We recognize the revenue for these services as they are performed. Breakage. For mileage credits that we estimate are not likely to be redeemed (“breakage”), we recognize the associated value proportionally during the period in which the remaining mileage credits are expected to be redeemed. Management uses statistical models to estimate breakage based on historical redemption patterns. A change in assumptions as to the period over which mileage credits are expected to be redeemed, the actual redemption activity for mileage credits or the estimated fair value of mileage credits expected to be redeemed could have a material impact on our revenue in the year in which the change occurs and in future years. |
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Regional Carriers Revenue | Regional Carriers Revenue Our regional carriers include both our contract carrier agreements with third-party regional carriers ("contract carriers") and our wholly-owned subsidiary, Endeavor. In May 2013, Endeavor emerged from bankruptcy and we became its sole owner pursuant to a confirmed plan of reorganization. Our contract carrier agreements are structured as either (1) capacity purchase agreements where we purchase all or a portion of the contract carrier's capacity and are responsible for selling the seat inventory we purchase or (2) revenue proration agreements, which are based on a fixed dollar or percentage division of revenues for tickets sold to passengers traveling on connecting flight itineraries. We record revenue related to our contract carriers and Endeavor in regional carriers passenger revenue and the related expenses in regional carriers expense. |
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Cargo Revenue | Cargo Revenue Cargo revenue is recognized when we provide the transportation. |
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Long-lived Assets | Long-Lived Assets The following table summarizes our property and equipment:
We record property and equipment at cost and depreciate or amortize these assets on a straight-line basis to their estimated residual values over their estimated useful lives. The estimated useful life for leasehold improvements is the shorter of lease term or estimated useful life. We capitalize certain internal and external costs incurred to develop and implement software, and amortize those costs over an estimated useful life of three to seven years. |
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Impairment of Long-lived Assets | We record impairment losses on flight equipment and other long-lived assets used in operations when events and circumstances indicate the assets may be impaired and the estimated future cash flows generated by those assets are less than their carrying amounts. Factors which could cause impairment include, but are not limited to, (1) a decision to permanently remove flight equipment or other long-lived assets from operations, (2) significant changes in the estimated useful life, (3) significant changes in projected cash flows, (4) permanent and significant declines in fleet fair values and (5) changes to the regulatory environment. For long-lived assets held for sale, we discontinue depreciation and record impairment losses when the carrying amount of these assets is greater than the fair value less the cost to sell. To determine whether impairments exist for aircraft used in operations, we group assets at the fleet-type level (the lowest level for which there are identifiable cash flows) and then estimate future cash flows based on projections of capacity, passenger mile yield, fuel costs, labor costs and other relevant factors. If an impairment occurs, the impairment loss recognized is the amount by which the fleet's carrying amount exceeds its estimated fair value. We estimate aircraft fair values using published sources, appraisals and bids received from third parties, as available. |
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Goodwill and Intangible Assets | Goodwill and Other Intangible Assets Our goodwill and identifiable intangible assets relate to the airline segment. We apply a fair value-based impairment test to the carrying value of goodwill and indefinite-lived intangible assets on an annual basis (as of October 1) and, if certain events or circumstances indicate that an impairment loss may have been incurred, on an interim basis. We assess the value of our goodwill and indefinite-lived assets under either a qualitative or quantitative approach. Under a qualitative approach, we consider various market factors, including the key assumptions listed below. We analyze these factors to determine if events and circumstances have affected the fair value of goodwill and indefinite-lived intangible assets. If we determine that it is more likely than not that the asset may be impaired, we use the quantitative approach to assess the asset's fair value and the amount of the impairment. Under a quantitative approach, we calculate the fair value of the asset using the key assumptions listed below. If the asset's carrying value exceeds its fair value calculated using the quantitative approach, we will record an impairment charge for the difference in fair value and carrying value. We value goodwill and indefinite-lived intangible assets primarily using market capitalization and income approach valuation techniques. These measurements include the following key assumptions: (1) forecasted revenues, expenses and cash flows, (2) terminal period revenue growth and cash flows, (3) an estimated weighted average cost of capital, (4) assumed discount rates depending on the asset and (5) a tax rate. These assumptions are consistent with those hypothetical market participants would use. Since we are required to make estimates and assumptions when evaluating goodwill and indefinite-lived intangible assets for impairment, actual transaction amounts may differ materially from these estimates. Changes in certain events and circumstances could result in impairment. Factors which could cause impairment include, but are not limited to, (1) negative trends in our market capitalization, (2) reduced profitability resulting from lower passenger mile yields or higher input costs (primarily related to fuel and employees), (3) lower passenger demand as a result of weakened U.S. and global economies, (4) interruption to our operations due to a prolonged employee strike, terrorist attack, or other reasons, (5) changes to the regulatory environment (e.g., diminished slot restrictions or additional Open Skies agreements), (6) competitive changes by other airlines and (7) strategic changes to our operations leading to diminished utilization of the intangible assets. Goodwill. When we evaluate goodwill for impairment using a quantitative approach, we estimate the fair value of the reporting unit by considering both market capitalization and projected discounted future cash flows (an income approach). If the reporting unit's fair value exceeds its carrying value, no further testing is required. If, however, the reporting unit's carrying value exceeds its fair value, we then determine the amount of the impairment charge, if any. We recognize an impairment charge if the carrying value of the reporting unit's goodwill exceeds its estimated fair value. Identifiable Intangible Assets. Indefinite-lived assets are not amortized and consist of routes, slots, the Delta tradename and assets related to SkyTeam. Definite-lived intangible assets consist primarily of marketing agreements and are amortized on a straight-line basis or under the undiscounted cash flows method over the estimated economic life of the respective agreements. Costs incurred to renew or extend the term of an intangible asset are expensed as incurred. We assess our indefinite-lived assets under a qualitative or quantitative approach. We analyze market factors to determine if events and circumstances have affected the fair value of the indefinite-lived intangible assets. If we determine that it is more likely than not that the asset value may be impaired, we use the quantitative approach to assess the asset's fair value and the amount of the impairment. We perform the quantitative impairment test for indefinite-lived intangible assets by comparing the asset's fair value to its carrying value. Fair value is estimated based on (1) recent market transactions, where available, (2) the royalty method for the Delta tradename (which assumes hypothetical royalties generated from using our tradename) or (3) projected discounted future cash flows (an income approach). We recognize an impairment charge if the asset's carrying value exceeds its estimated fair value. |
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Goodwill | Goodwill. When we evaluate goodwill for impairment using a quantitative approach, we estimate the fair value of the reporting unit by considering both market capitalization and projected discounted future cash flows (an income approach). If the reporting unit's fair value exceeds its carrying value, no further testing is required. If, however, the reporting unit's carrying value exceeds its fair value, we then determine the amount of the impairment charge, if any. We recognize an impairment charge if the carrying value of the reporting unit's goodwill exceeds its estimated fair value. |
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Intangible Assets | Identifiable Intangible Assets. Indefinite-lived assets are not amortized and consist of routes, slots, the Delta tradename and assets related to SkyTeam. Definite-lived intangible assets consist primarily of marketing agreements and are amortized on a straight-line basis or under the undiscounted cash flows method over the estimated economic life of the respective agreements. Costs incurred to renew or extend the term of an intangible asset are expensed as incurred. We assess our indefinite-lived assets under a qualitative or quantitative approach. We analyze market factors to determine if events and circumstances have affected the fair value of the indefinite-lived intangible assets. If we determine that it is more likely than not that the asset value may be impaired, we use the quantitative approach to assess the asset's fair value and the amount of the impairment. We perform the quantitative impairment test for indefinite-lived intangible assets by comparing the asset's fair value to its carrying value. Fair value is estimated based on (1) recent market transactions, where available, (2) the royalty method for the Delta tradename (which assumes hypothetical royalties generated from using our tradename) or (3) projected discounted future cash flows (an income approach). We recognize an impairment charge if the asset's carrying value exceeds its estimated fair value. |
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Income Taxes | Income Taxes We account for deferred income taxes under the liability method. We recognize deferred tax assets and liabilities based on the tax effects of temporary differences between the financial statement and tax basis of assets and liabilities, as measured by current enacted tax rates. Deferred tax assets and liabilities are recorded net as noncurrent deferred income taxes. A valuation allowance is recorded to reduce deferred tax assets when necessary. |
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Manufacturers' Credits | Manufacturers' Credits We periodically receive credits in connection with the acquisition of aircraft and engines. These credits are deferred until the aircraft and engines are delivered, and then applied as a reduction to the cost of the related equipment. |
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Maintenance Costs | Maintenance Costs We record maintenance costs to aircraft maintenance materials and outside repairs. Maintenance costs are expensed as incurred, except for costs incurred under power-by-the-hour contracts, which are expensed based on actual hours flown. Power-by-the-hour contracts transfer certain risk to third-party service providers and fix the amount we pay per flight hour to the service provider in exchange for maintenance and repairs under a predefined maintenance program. Modifications that enhance the operating performance or extend the useful lives of airframes or engines are capitalized and amortized over the remaining estimated useful life of the asset or the remaining lease term, whichever is shorter. |
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Advertising Costs | Advertising Costs We expense advertising costs in passenger commissions and other selling expenses in the year incurred. |
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Commissions | Commissions Passenger sales commissions are recognized in operating expense when the related revenue is recognized. |
Summary of Significant Accounting Policies (Tables) |
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Dec. 31, 2015 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Accounting Policies [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of derivative contracts, classification of related gains (losses) on consolidate statements of operations | The following table summarizes the risk each type of derivative contract is hedging and the classification of related gains and losses on our Consolidated Statements of Operations:
The following table summarizes the accounting treatment of our derivative contracts:
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Summary of property and equipment | The following table summarizes our property and equipment:
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Fair Value Measurements (Tables) |
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Fair Value Disclosures [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Assets (Liabilities) Measured at Fair Value on a Recurring Basis | Assets (Liabilities) Measured at Fair Value on a Recurring Basis(1)
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Investments - Short Term Investments (Tables) |
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Investments, Debt and Equity Securities [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||
Maturities for short-term investments | The estimated fair values of short-term investments, which approximate cost at December 31, 2015, are shown below by contractual maturity. Actual maturities may differ from contractual maturities because issuers of the securities may have the right to retire our investments without prepayment penalties.
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Derivatives and Risk Management (Tables) |
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Derivative Instruments and Hedging Activities Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Hedge Position | Hedge Position as of December 31, 2015
Hedge Position as of December 31, 2014
Offsetting Assets and Liabilities We have master netting arrangements with all of our counterparties giving us the right of setoff. We have elected not to offset the fair value positions recorded on our Consolidated Balance Sheets. The following table shows the potential net fair value positions had we elected to offset.
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Schedule of Designated Hedge Gains (Losses) | Gains (losses) related to our designated hedge contracts during the years ended December 31, 2015, 2014 and 2013 are as follows:
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Intangible Assets (Tables) |
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Goodwill and Intangible Assets Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Indefinite-Lived Intangible Assets |
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Definite-Lived Intangible Assets |
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Long-Term Debt (Tables) |
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Debt Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of debt instruments | These covenants require us to maintain:
The Pacific Facilities include affirmative, negative and financial covenants that could restrict our ability to, among other things, make investments, sell or otherwise dispose of collateral if we are not in compliance with the collateral coverage ratio tests described below, pay dividends or repurchase stock.
The following table summarizes our long-term debt:
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Schedule of additional collateral on debt | The details of the 2015-1 EETC, which is secured by 15 aircraft, are shown in the table below:
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Schedule of line of credit facilities | The table below shows availability under revolving credit facilities, all of which were undrawn, as of December 31, 2015:
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Summary of scheduled maturities of debt | The following table summarizes scheduled maturities of our debt for the years succeeding December 31, 2015:
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Schedule of estimated fair value of debt instruments | he fair value of debt, shown below, is based primarily on reported market values, recently completed market transactions and estimates based on interest rates, maturities, credit risk and underlying collateral. Long-term debt is principally classified as Level 2 within the fair value hierarchy.
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Lease Obligations (Tables) |
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Dec. 31, 2015 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Leases [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of future minimum lease payments for capital leases | The following tables summarize our minimum rental commitments under capital leases and noncancelable operating leases (including certain aircraft flown by regional carriers) with initial or remaining terms in excess of one year for the years succeeding December 31, 2015: Capital Leases
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Schedule of future minimum rental payments for operating leases | Operating Leases
|
Employee Benefit Plans (Tables) |
12 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Dec. 31, 2015 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Defined Benefit Pension Plans and Defined Benefit Postretirement Plans Disclosure [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of defined benefit plans disclosures | Benefit Obligations, Fair Value of Plan Assets and Funded Status
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Schedule of amounts recognized in balance sheet | Balance Sheet Position
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Schedule of net benefit costs | Net Periodic Cost
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Schedule of assumptions used | We used the following actuarial assumptions to determine our benefit obligations and our net periodic cost for the periods presented:
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Schedule of effect of one-percentage-point change in assumed health care cost trend rates | A 1% change in the healthcare cost trend rate used in measuring the accumulated plan benefit obligation for these plans, which provide benefits to eligible retirees and their dependents who are under age 65, at December 31, 2015, would have the following effects:
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Schedule of expected benefit payments | The following table summarizes, the benefit payments that are scheduled to be paid in the years ending December 31:
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Fair value, assets measured on recurring basis |
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Fair value, assets measured on recurring basis, unobservable input reconciliation | The following table shows the changes in our benefit plan assets classified in Level 3:
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Commitments and Contingencies (Tables) |
12 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||
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Dec. 31, 2015 | |||||||||||||||||||||||||||||||||||||||||||||
Commitments and Contingencies Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||
Aircraft purchase and lease commitments |
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Airline capacity purchase arrangements | Accordingly, our actual payments under these agreements could differ materially from the minimum fixed obligations set forth in the table below.
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Employees Under Collective Bargaining Agreements | The following table shows our domestic airline employee groups that are represented by unions.
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Income Taxes (Tables) |
12 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Dec. 31, 2015 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Income Tax Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Income tax benefit (provision) | Our income tax (provision) benefit consisted of the following:
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Effective income tax rate reconcillation | The following table presents the principal reasons for the difference between the effective tax rate and the U.S. federal statutory income tax rate:
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Deferred taxes | The following table shows significant components of our deferred tax assets and liabilities:
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Summary of valuation allowance and associated activity | The following table shows the balance of our valuation allowance and the associated activity:
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Accumulated Other Comprehensive Loss (Tables) |
12 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Dec. 31, 2015 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Accumulated Other Comprehensive Income (Loss), Net of Tax [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of accumulated other comprehensive loss | The following table shows the components of accumulated other comprehensive loss:
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Segments & Geograhic Information (Tables) |
12 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Dec. 31, 2015 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Segment Reporting [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Reconciliation of Segments to Consolidated Amounts | Our operating revenue by geographic region (as defined by the DOT) is summarized in the following table:
Segment results are prepared based on our internal accounting methods described below, with reconciliations to consolidated amounts in accordance with GAAP. Our segments are not designed to measure operating income or loss directly related to the products and services included in each segment on a stand-alone basis.
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Restructuring and Other Items (Tables) |
12 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Dec. 31, 2015 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Restructuring and Related Activities [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of amounts recorded on consolidated statements of operations | The following table shows amounts recorded in restructuring and other on our Consolidated Statements of Operations:
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Schedule of restructuring charges | The following table shows the balances and activity for restructuring charges:
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Earnings Per Share (Tables) |
12 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Dec. 31, 2015 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Earnings Per Share [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Computation of basic and diluted earnings per share | The following table shows our computation of basic and diluted earnings per share:
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Quarterly Financial Data (Unaudited) (Tables) |
12 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Dec. 31, 2015 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Quarterly Financial Information Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of quarterly financial information | The following table summarizes our unaudited results of operations on a quarterly basis. The quarterly earnings (loss) per share amounts for a year will not add to the earnings per share for that year due to the weighting of shares used in calculating per share data.
Special Items
|
Summary of Significant Accounting Policies (Details) - USD ($) $ in Millions |
12 Months Ended | |
---|---|---|
Dec. 31, 2015 |
Dec. 31, 2014 |
|
Property, Plant and Equipment [Line Items] | ||
Less: accumulated depreciation and amortization | $ (10,871) | $ (9,340) |
Total property and equipment, net | 23,039 | 21,929 |
Flight Equipment | ||
Property, Plant and Equipment [Line Items] | ||
Property and equipment, gross | $ 26,057 | 24,313 |
Estimated useful life | 20-32 years | |
Ground Property and Equipment | ||
Property, Plant and Equipment [Line Items] | ||
Property and equipment, gross | $ 5,862 | 5,198 |
Estimated useful life | 3-40 years | |
Flight and Ground Equipment Under Capital Lease | ||
Property, Plant and Equipment [Line Items] | ||
Property and equipment, gross | $ 1,112 | 1,141 |
Less: accumulated depreciation and amortization | $ (782) | (767) |
Estimated useful life | Shorter of lease term or estimated useful life | |
Advance Payments for Equipment | ||
Property, Plant and Equipment [Line Items] | ||
Property and equipment, gross | $ 879 | $ 617 |
Maximum | Flight Equipment | ||
Property, Plant and Equipment [Line Items] | ||
Estimated useful life | 32 | |
Maximum | Ground Property and Equipment | ||
Property, Plant and Equipment [Line Items] | ||
Estimated useful life | 40 | |
Minimum | Flight Equipment | ||
Property, Plant and Equipment [Line Items] | ||
Estimated useful life | 20 | |
Minimum | Ground Property and Equipment | ||
Property, Plant and Equipment [Line Items] | ||
Estimated useful life | 3 |
Summary of Significant Accounting Policies - Narrative (Details) - USD ($) $ in Millions |
12 Months Ended | ||
---|---|---|---|
Dec. 31, 2015 |
Dec. 31, 2014 |
Dec. 31, 2013 |
|
Ownership interest | 50.00% | ||
Accumulated depreciation and amortization | $ 10,871 | $ 9,340 | |
Depreciation and amortization expense related to property and equipment | 1,800 | 1,700 | $ 1,600 |
Amortization of capitalized software | 148 | 129 | 110 |
Net book value of capitalized software | 420 | 411 | |
Advertising expense | 225 | 225 | $ 225 |
Pension plan fair value | $ 10,030 | 10,351 | |
Minimum | |||
Spare parts, estimated residual value | 5.00% | ||
Maximum | |||
Spare parts, estimated residual value | 10.00% | ||
Software and software development costs | Minimum | |||
Estimated useful life | 3 years | ||
Software and software development costs | Maximum | |||
Estimated useful life | 7 years | ||
New Accounting Principle | Prepaid expenses | |||
Reclassification adjustment | 32 | ||
New Accounting Principle | Current debt | |||
Reclassification adjustment | 32 | ||
New Accounting Principle | Noncurrent assets | |||
Reclassification adjustment | 84 | ||
New Accounting Principle | Long-term debt | |||
Reclassification adjustment | 84 | ||
New Accounting Principle | Current Assets | |||
Reclassification adjustment | 3,300 | ||
New Accounting Principle | Deferred Income Taxes | |||
Reclassification adjustment | $ 3,300 | ||
Grupo Aeromexico | |||
Loss on available for sales securties | $ 66 |
Fair Value Measurements - Schedule of Fair Value Measurement (Details) - USD ($) $ in Millions |
Dec. 31, 2015 |
Dec. 31, 2014 |
---|---|---|
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis | ||
Cash equivalents | $ 1,543 | $ 1,612 |
Restricted cash equivalents and investments | 49 | 37 |
Fuel hedge contracts | (672) | (1,848) |
Interest rate contract | (3) | (7) |
Foreign currency exchange contracts | 94 | 73 |
Level 1 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis | ||
Cash equivalents | 1,543 | 1,612 |
Restricted cash equivalents and investments | 49 | 37 |
Fuel hedge contracts | 65 | (167) |
Interest rate contract | 0 | 0 |
Foreign currency exchange contracts | 0 | 0 |
Level 2 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis | ||
Cash equivalents | 0 | 0 |
Restricted cash equivalents and investments | 0 | 0 |
Fuel hedge contracts | (737) | (1,681) |
Interest rate contract | (3) | (7) |
Foreign currency exchange contracts | 94 | 73 |
Short-term investments | U.S. government and agency securities | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis | ||
Investments, Fair Value Disclosure | 151 | 59 |
Short-term investments | U.S. government and agency securities | Level 1 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis | ||
Investments, Fair Value Disclosure | 74 | 0 |
Short-term investments | U.S. government and agency securities | Level 2 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis | ||
Investments, Fair Value Disclosure | 77 | 59 |
Short-term investments | Asset- and mortgage-backed securities | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis | ||
Investments, Fair Value Disclosure | 380 | 392 |
Short-term investments | Asset- and mortgage-backed securities | Level 1 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis | ||
Investments, Fair Value Disclosure | 0 | 0 |
Short-term investments | Asset- and mortgage-backed securities | Level 2 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis | ||
Investments, Fair Value Disclosure | 380 | 392 |
Short-term investments | Corporate obligations | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis | ||
Investments, Fair Value Disclosure | 896 | 749 |
Short-term investments | Corporate obligations | Level 1 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis | ||
Investments, Fair Value Disclosure | 0 | 0 |
Short-term investments | Corporate obligations | Level 2 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis | ||
Investments, Fair Value Disclosure | 896 | 749 |
Short-term investments | Other fixed income securities | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis | ||
Investments, Fair Value Disclosure | 38 | 17 |
Short-term investments | Other fixed income securities | Level 1 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis | ||
Investments, Fair Value Disclosure | 0 | 0 |
Short-term investments | Other fixed income securities | Level 2 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis | ||
Investments, Fair Value Disclosure | 38 | 17 |
Long-term investments | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis | ||
Investments, Fair Value Disclosure | 155 | 118 |
Long-term investments | Level 1 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis | ||
Investments, Fair Value Disclosure | 130 | 90 |
Long-term investments | Level 2 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis | ||
Investments, Fair Value Disclosure | $ 25 | $ 28 |
Fair Value Measurements - Narrative (Details) |
12 Months Ended |
---|---|
Dec. 31, 2015 | |
Minimum | |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis | |
Assumed volatilities in valuation of fuel contracts | 31.00% |
Maximum | |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis | |
Assumed volatilities in valuation of fuel contracts | 53.00% |
Investments - Narrative (Details) - USD ($) shares in Millions |
1 Months Ended | 12 Months Ended | |||
---|---|---|---|---|---|
Jun. 30, 2013 |
Dec. 31, 2015 |
Dec. 31, 2014 |
Dec. 31, 2013 |
May. 31, 2016 |
|
Equity Method Investments [Line Items] | |||||
Net (loss) gain on investments | $ (45,000,000) | $ 10,000,000 | $ (19,000,000) | ||
Payments to Acquire Equity Method Investments | $ 500,000,000 | $ 0 | $ 360,000,000 | ||
Virgin Atlantic | |||||
Equity Method Investments [Line Items] | |||||
Noncontrolling interest, ownership percentage by parent | 49.00% | ||||
Payments to Acquire Equity Method Investments | $ 360,000,000 | ||||
GOL | |||||
Equity Method Investments [Line Items] | |||||
Ownership percentage | 9.50% | ||||
China Eastern | |||||
Equity Method Investments [Line Items] | |||||
Cost method investments | $ 450,000,000 | ||||
Ownership percentage in cost method investments | 3.50% | ||||
Preferred stock | GOL | |||||
Equity Method Investments [Line Items] | |||||
Underlying equity in net assets | $ 50,000,000 | ||||
Fair value of investment | 21,000,000 | ||||
Net (loss) gain on investments | (84,000,000) | ||||
Term loan facility | GOL | |||||
Equity Method Investments [Line Items] | |||||
Guarantee borrowings on third party debt | $ 300,000,000 | ||||
Guarantee borrowings on third party debt, term | 5 years | ||||
Equity Contract | Grupo Aeromexico | |||||
Equity Method Investments [Line Items] | |||||
Derivative, nonmonetary notional amount, shares | 58.9 | ||||
Equity Contract | Grupo Aeromexico | Forecast | |||||
Equity Method Investments [Line Items] | |||||
Noncontrolling interest, ownership percentage by parent | 49.00% |
Investments - Schedule of Available For Sale Debt Maturities (Details) $ in Millions |
Dec. 31, 2015
USD ($)
|
---|---|
Available-for-sale Securities, Debt Maturities, Fair Value, Fiscal Year Maturity | |
Due in one year or less | $ 344 |
Due after one year through three years | 905 |
Due after three years through five years | 116 |
Due after five years | 100 |
Total | $ 1,465 |
Derivatives and Risk Management - Schedule of Derivative Instruments of Financial Position (Details) ¥ in Millions, gal in Millions, CAD in Millions, $ in Millions |
Dec. 31, 2015
JPY (¥)
gal
|
Dec. 31, 2015
CAD
gal
|
Dec. 31, 2015
USD ($)
gal
|
Dec. 31, 2014
JPY (¥)
gal
|
Dec. 31, 2014
CAD
gal
|
Dec. 31, 2014
USD ($)
gal
|
---|---|---|---|---|---|---|
Derivatives, Fair Value [Line Items] | ||||||
Foreign currency exchange contracts | $ 94 | $ 73 | ||||
Fuel contracts, hedge derivatives, net | (672) | (1,848) | ||||
Net derivative contracts, hedge derivatives, net | (581) | (1,782) | ||||
Hedge derivative asset | ||||||
Derivatives, Fair Value [Line Items] | ||||||
Total derivative contracts, assets | 1,987 | 1,078 | ||||
Net derivative contracts, assets | 143 | 29 | ||||
Other noncurrent assets | ||||||
Derivatives, Fair Value [Line Items] | ||||||
Total derivative contracts, assets | 24 | 52 | ||||
Net derivative contracts, assets | 21 | 49 | ||||
Hedge derivative liability | ||||||
Derivatives, Fair Value [Line Items] | ||||||
Total derivative contracts, liabilities | (2,581) | (2,772) | ||||
Net derivative contracts, liabilities | (737) | (1,723) | ||||
Other noncurrent liabilities | ||||||
Derivatives, Fair Value [Line Items] | ||||||
Total derivative contracts, liabilities | (11) | (140) | ||||
Net derivative contracts, liabilities | (8) | (137) | ||||
Interest rate contract | Designated as hedging instrument | ||||||
Derivatives, Fair Value [Line Items] | ||||||
Interest rate contracts (fair value hedges), hedge derivatives, net | (3) | (7) | ||||
Interest rate contract | Designated as hedging instrument | Hedge derivative asset | ||||||
Derivatives, Fair Value [Line Items] | ||||||
Interest rate contracts (fair value hedges), assets | 4 | 5 | ||||
Interest rate contract | Designated as hedging instrument | Other noncurrent assets | ||||||
Derivatives, Fair Value [Line Items] | ||||||
Interest rate contracts (fair value hedges), assets | 0 | 0 | ||||
Interest rate contract | Designated as hedging instrument | Hedge derivative liability | ||||||
Derivatives, Fair Value [Line Items] | ||||||
Interest rate contracts (fair value hedges), liabilities | 0 | 0 | ||||
Interest rate contract | Designated as hedging instrument | Other noncurrent liabilities | ||||||
Derivatives, Fair Value [Line Items] | ||||||
Interest rate contracts (fair value hedges), liabilities | (7) | (12) | ||||
Interest rate contract | Fair value hedging | Designated as hedging instrument | ||||||
Derivatives, Fair Value [Line Items] | ||||||
Derivative, notional balance | 384 | 416 | ||||
Foreign exchange contract | Designated as hedging instrument | ||||||
Derivatives, Fair Value [Line Items] | ||||||
Foreign currency exchange contracts | 94 | 73 | ||||
Foreign exchange contract | Designated as hedging instrument | Hedge derivative asset | ||||||
Derivatives, Fair Value [Line Items] | ||||||
Foreign currency exchange contracts, assets | 76 | 25 | ||||
Foreign exchange contract | Designated as hedging instrument | Other noncurrent assets | ||||||
Derivatives, Fair Value [Line Items] | ||||||
Foreign currency exchange contracts, assets | 20 | 49 | ||||
Foreign exchange contract | Designated as hedging instrument | Hedge derivative liability | ||||||
Derivatives, Fair Value [Line Items] | ||||||
Foreign currency exchange contracts, liabilities | (1) | (1) | ||||
Foreign exchange contract | Designated as hedging instrument | Other noncurrent liabilities | ||||||
Derivatives, Fair Value [Line Items] | ||||||
Foreign currency exchange contracts, liabilities | $ (1) | $ 0 | ||||
Foreign exchange contract | Cash flow hedging | Designated as hedging instrument | ||||||
Derivatives, Fair Value [Line Items] | ||||||
Derivative, notional balance | ¥ 46,920 | CAD 395 | ¥ 77,576 | CAD 511 | ||
Fuel hedge contract | Not designated as hedging instrument | ||||||
Derivatives, Fair Value [Line Items] | ||||||
Derivative, nonmonetary notional balance | gal | 887 | 887 | 887 | 3,286 | 3,286 | 3,286 |
Fuel contracts, hedge derivatives, net | $ (672) | $ (1,848) | ||||
Fuel hedge contract | Not designated as hedging instrument | Hedge derivative asset | ||||||
Derivatives, Fair Value [Line Items] | ||||||
Fuel contracts, assets | 1,907 | 1,048 | ||||
Fuel hedge contract | Not designated as hedging instrument | Other noncurrent assets | ||||||
Derivatives, Fair Value [Line Items] | ||||||
Fuel contracts, assets | 4 | 3 | ||||
Fuel hedge contract | Not designated as hedging instrument | Hedge derivative liability | ||||||
Derivatives, Fair Value [Line Items] | ||||||
Fuel contracts, liabilities | (2,580) | (2,771) | ||||
Fuel hedge contract | Not designated as hedging instrument | Other noncurrent liabilities | ||||||
Derivatives, Fair Value [Line Items] | ||||||
Fuel contracts, liabilities | $ (3) | $ (128) |
Derivatives and Risk Management - Schedule of Designated Hedge Gain (Loss) (Details) - USD ($) $ in Millions |
12 Months Ended | ||
---|---|---|---|
Dec. 31, 2015 |
Dec. 31, 2014 |
Dec. 31, 2013 |
|
Derivative Instruments, Gain (Loss) [Line Items] | |||
Effective portion reclassified from AOCI to earnings | $ 198 | $ 127 | $ 135 |
Effective portion recognized in other comprehensive income (loss) | (130) | 4 | 161 |
Interest rate contract | |||
Derivative Instruments, Gain (Loss) [Line Items] | |||
Effective portion reclassified from AOCI to earnings | 0 | (31) | 0 |
Effective portion recognized in other comprehensive income (loss) | 0 | 38 | 28 |
Foreign exchange contract | |||
Derivative Instruments, Gain (Loss) [Line Items] | |||
Effective portion reclassified from AOCI to earnings | 198 | 158 | 135 |
Effective portion recognized in other comprehensive income (loss) | $ (130) | $ (34) | $ 133 |
Derivatives and Risk Management - Narrative (Details) - USD ($) $ in Millions |
6 Months Ended | 12 Months Ended | |||||
---|---|---|---|---|---|---|---|
Dec. 31, 2016 |
Dec. 31, 2015 |
Dec. 31, 2017 |
Dec. 31, 2016 |
Dec. 31, 2015 |
Dec. 31, 2014 |
Dec. 31, 2013 |
|
Derivative [Line Items] | |||||||
Derivative, gain (loss), net | $ 1,366 | $ (2,186) | $ 86 | ||||
Expected payments for (proceeds from) derivative instrument | $ (300) | ||||||
Proceeds from hedging activities | 429 | 0 | 0 | ||||
Payments for derivative instrument | 71 | 0 | $ 0 | ||||
Unrealized gain on foreign currency exchange contracts | 150 | ||||||
Cash flow hedge gain to be reclassified within twelve months | 75 | ||||||
Hedge margin receivable | $ 119 | 119 | 925 | ||||
Fuel hedge contract | |||||||
Derivative [Line Items] | |||||||
Derivative, gain (loss), net | $ (741) | $ (2,000) | |||||
Forecast | |||||||
Derivative [Line Items] | |||||||
Expected payments for (proceeds from) derivative instrument | $ (300) | $ 300 | $ 300 | ||||
Subsequent Event | Forecast | |||||||
Derivative [Line Items] | |||||||
Expected payments for (proceeds from) derivative instrument | $ 725 |
Intangible Assets - Indefinite-Lived Intangible Assets (Details) - USD ($) $ in Millions |
Dec. 31, 2015 |
Dec. 31, 2014 |
---|---|---|
Indefinite-lived Intangible Assets | ||
Indefinite-lived intangible assets | $ 4,696 | $ 4,420 |
International routes and slots | ||
Indefinite-lived Intangible Assets | ||
Indefinite-lived intangible assets | 2,563 | 2,287 |
Delta tradename | ||
Indefinite-lived Intangible Assets | ||
Indefinite-lived intangible assets | 850 | 850 |
SkyTeam-related assets | ||
Indefinite-lived Intangible Assets | ||
Indefinite-lived intangible assets | 661 | 661 |
Domestic slots | ||
Indefinite-lived Intangible Assets | ||
Indefinite-lived intangible assets | $ 622 | $ 622 |
Intangible Assets - Definite-Lived Intangible Assets (Details) - USD ($) $ in Millions |
Dec. 31, 2015 |
Dec. 31, 2014 |
---|---|---|
Finite-Lived Intangible Assets | ||
Definite-Lived Intangible Assets, Gross Carrying Amount | $ 976 | $ 976 |
Accumulated Amortization | (811) | (793) |
Marketing agreements | ||
Finite-Lived Intangible Assets | ||
Definite-Lived Intangible Assets, Gross Carrying Amount | 730 | 730 |
Accumulated Amortization | (658) | (648) |
Contracts | ||
Finite-Lived Intangible Assets | ||
Definite-Lived Intangible Assets, Gross Carrying Amount | 193 | 193 |
Accumulated Amortization | (100) | (92) |
Other | ||
Finite-Lived Intangible Assets | ||
Definite-Lived Intangible Assets, Gross Carrying Amount | 53 | 53 |
Accumulated Amortization | $ (53) | $ (53) |
Intangible Assets - Narrative (Details) $ in Millions |
1 Months Ended | 12 Months Ended | 60 Months Ended | ||
---|---|---|---|---|---|
Dec. 31, 2015
USD ($)
slot
|
Dec. 31, 2015
USD ($)
slot
|
Dec. 31, 2014
USD ($)
|
Dec. 31, 2013
USD ($)
|
Dec. 31, 2020
USD ($)
|
|
Finite-Lived Intangible Assets | |||||
Acquisition of slots | $ 276 | $ 0 | $ 47 | ||
Intangible assets, amortization expense | $ 18 | $ 55 | $ 70 | ||
London-Heathrow | |||||
Finite-Lived Intangible Assets | |||||
Number of slots acquired | slot | 6 | 6 | |||
Acquisition of slots | $ 276 | ||||
Forecast | |||||
Finite-Lived Intangible Assets | |||||
Intangible assets, amortization expense | $ 17 |
Long-Term Debt (Details) - USD ($) $ in Millions |
12 Months Ended | |
---|---|---|
Dec. 31, 2015 |
Dec. 31, 2014 |
|
Debt Instrument [Line Items] | ||
Long-term debt, gross | $ 8,098 | $ 9,469 |
Unamortized discount and debt issue cost, net | (152) | (206) |
Long-term debt | 7,946 | 9,263 |
Long-term debt, current maturities | (1,415) | (1,075) |
Long-term debt, excluding current maturities | $ 6,531 | 8,188 |
Pacific Term Loan B-1 | ||
Debt Instrument [Line Items] | ||
Debt instrument, maturity date | Oct. 31, 2018 | |
Debt instrument, interest rate, stated percentage | 3.25% | |
Secured debt | $ 1,067 | 1,078 |
Pacific Term Loan B-2 | ||
Debt Instrument [Line Items] | ||
Debt instrument, maturity date | Apr. 30, 2016 | |
Debt instrument, interest rate, stated percentage | 2.67% | |
Secured debt | $ 388 | 392 |
Pacific Revolving Facility | ||
Debt Instrument [Line Items] | ||
Line of credit facility, amount outstanding | $ 0 | 0 |
Debt instrument, maturity date range, start | Dec. 31, 2017 | |
Debt instrument, maturity date range, end | Dec. 31, 2018 | |
Term loan facility | 2015 Credit Facilities | ||
Debt Instrument [Line Items] | ||
Debt instrument, maturity date | Aug. 31, 2022 | |
Debt instrument, interest rate, stated percentage | 3.25% | |
Secured debt | $ 499 | 0 |
Term loan facility | 2011 Credit Facilities | ||
Debt Instrument [Line Items] | ||
Secured debt | $ 0 | 1,327 |
Revolving credit facility | 2015 Credit Facilities | ||
Debt Instrument [Line Items] | ||
Debt instrument, maturity date | Aug. 31, 2020 | |
Line of credit facility, amount outstanding | $ 0 | 0 |
Revolving credit facility | 2011 Credit Facilities | ||
Debt Instrument [Line Items] | ||
Line of credit facility, amount outstanding | 0 | 0 |
Certificates | ||
Debt Instrument [Line Items] | ||
Secured debt | $ 3,264 | 3,226 |
Debt instrument, maturity date range, start | Dec. 31, 2016 | |
Debt instrument, maturity date range, end | Dec. 31, 2027 | |
Debt instrument, interest rate, stated percentage rate range, minimum | 3.63% | |
Debt instrument, interest rate, stated percentage rate range, maximum | 9.75% | |
Notes | ||
Debt Instrument [Line Items] | ||
Secured debt | $ 2,564 | 2,988 |
Debt instrument, maturity date range, start | Dec. 31, 2016 | |
Debt instrument, maturity date range, end | Dec. 31, 2027 | |
Debt instrument, interest rate, stated percentage rate range, minimum | 0.83% | |
Debt instrument, interest rate, stated percentage rate range, maximum | 6.76% | |
Other secured financings | ||
Debt Instrument [Line Items] | ||
Secured debt | $ 316 | 458 |
Debt instrument, maturity date range, start | Dec. 31, 2016 | |
Debt instrument, maturity date range, end | Dec. 31, 2031 | |
Debt instrument, interest rate, stated percentage rate range, minimum | 2.24% | |
Debt instrument, interest rate, stated percentage rate range, maximum | 8.75% | |
Bank revolving credit facilities | ||
Debt Instrument [Line Items] | ||
Line of credit facility, amount outstanding | $ 0 | $ 0 |
Debt instrument, maturity date range, start | Dec. 31, 2016 | |
Debt instrument, maturity date range, end | Dec. 31, 2017 |
Long-Term Debt Long-Term Debt - Senior Secured Credit Facilities (Details) |
12 Months Ended |
---|---|
Dec. 31, 2015
USD ($)
Rate
| |
Debt Instrument [Line Items] | |
Annual repayment required as percentage of original principal amount | Rate | 1.00% |
Senior secured credit facility | |
Debt Instrument [Line Items] | |
Cash settlement of long-term debt | $ 1,300,000,000 |
Noncash settlement of debt | 1,200,000,000 |
Senior secured credit facility | Term loan facility | Line of credit | |
Debt Instrument [Line Items] | |
Maximum borrowing capacity | 500,000,000 |
Senior secured credit facility | Revolving credit facility | Line of credit | |
Debt Instrument [Line Items] | |
Maximum borrowing capacity | $ 1,500,000,000 |
Long-Term Debt Long-Term Debt - Schedule of Additional Collateral on Debt (Details) - Secured Debt $ in Millions |
Aug. 31, 2015
USD ($)
|
---|---|
Debt Instrument [Line Items] | |
Total Principal | $ 500 |
2015-1 Class AA Certificates | |
Debt Instrument [Line Items] | |
Total Principal | $ 313 |
Fixed interest rate amount | 3.625% |
2015-1 Class A Certificates | |
Debt Instrument [Line Items] | |
Total Principal | $ 69 |
Fixed interest rate amount | 3.875% |
2015-1 Class B Certificates | |
Debt Instrument [Line Items] | |
Total Principal | $ 118 |
Fixed interest rate amount | 4.25% |
Long-Term Debt Long-Term Debt - Coverage Ratio Requirements (Details) |
12 Months Ended |
---|---|
Dec. 31, 2015
USD ($)
| |
Pacific Facilities | |
Debt Instrument [Line Items] | |
Covenant terms, minimum fixed charge coverage ratio | 1.20 |
Minimum collateral coverage ratio | 1.60 |
Covenant terms, minimum unrestricted liquidity, unrestricted cash, permitted investments and undrawn revolving credit facilities | $ 2,000,000,000 |
2015 Credit Facilities | |
Debt Instrument [Line Items] | |
Covenant terms, minimum fixed charge coverage ratio | 0 |
Minimum collateral coverage ratio | 1.60 |
Covenant terms, minimum unrestricted liquidity, unrestricted cash, permitted investments and undrawn revolving credit facilities | $ 2,000,000,000 |
Line of credit | 2015 Credit Facilities | |
Debt Instrument [Line Items] | |
Maximum borrowing capacity | $ 2,000,000,000 |
Collateral excluding non-Pacific international routes | 2015 Credit Facilities | |
Debt Instrument [Line Items] | |
Minimum collateral coverage ratio | 0 |
Long-Term Debt Long-Term Debt - Line of Credit Facilities (Details) $ in Millions |
Dec. 31, 2015
USD ($)
|
---|---|
Line of Credit Facility [Line Items] | |
Line of credit facility, current borrowing capacity | $ 2,207 |
Revolving credit facility | |
Line of Credit Facility [Line Items] | |
Line of credit facility, current borrowing capacity | 1,500 |
Pacific Routes Revolving Facility | |
Line of Credit Facility [Line Items] | |
Line of credit facility, current borrowing capacity | 450 |
Bank revolving credit facilities | |
Line of Credit Facility [Line Items] | |
Line of credit facility, current borrowing capacity | $ 257 |
Long-Term Debt - Schedule of Maturities of Long-Term Debt (Details) - USD ($) $ in Millions |
Dec. 31, 2015 |
Dec. 31, 2014 |
---|---|---|
Long-term Debt, Fiscal Year Maturity | ||
2016 | $ 1,442 | |
2017 | 869 | |
2018 | 2,061 | |
2019 | 1,189 | |
2020 | 456 | |
Thereafter | 2,081 | |
Total | 8,098 | $ 9,469 |
Amortization of Debt Discount and Debt Issue Cost, net | ||
2016 | (40) | |
2017 | (39) | |
2018 | (35) | |
2019 | (22) | |
2020 | (4) | |
Thereafter | (12) | |
Total | (152) | (206) |
Long-term debt | $ 7,946 | $ 9,263 |
Long-Term Debt - Schedule of Fair Value of Debt (Details) - USD ($) $ in Millions |
Dec. 31, 2015 |
Dec. 31, 2014 |
---|---|---|
Debt Disclosure [Abstract] | ||
Total debt at par value | $ 8,098 | $ 9,469 |
Unamortized discount and debt issue cost, net | (152) | (206) |
Net carrying amount | 7,946 | 9,263 |
Debt instrument, fair value disclosure | $ 8,400 | $ 9,800 |
Long-Term Debt - Narrative (Details) $ in Millions |
Dec. 31, 2015
USD ($)
aircraft
|
---|---|
Secured Debt | |
Debt Instrument [Line Items] | |
Debt Instrument, Collateral, Number of Aircraft | aircraft | 15 |
Not designated as hedging instrument | Fuel hedge contract | |
Debt Instrument [Line Items] | |
Derivative, Amount Secured | $ | $ 187 |
Lease Obligations - Schedule of Future Minimum Lease Payments for Capital Leases (Details) $ in Millions |
Dec. 31, 2015
USD ($)
|
---|---|
Capital Leases, Future Minimum Payments Due, Fiscal Year Maturity | |
Capital leases, future minimum payments due in 2016 | $ 183 |
Capital leases, future minimum payments due in 2017 | 114 |
Capital leases, future minimum payments due in 2018 | 56 |
Capital leases, future minimum payments due in 2019 | 41 |
Capital leases, future minimum payments due in 2020 | 29 |
Capital leases, future minimum payments due thereafter | 39 |
Capital leases, future minimum payments due | 462 |
Capital leases, future minimum payments, interest included in payments | (79) |
Capital leases, future minimum payments, present value of net minimum payments | 383 |
Capital lease obligations, current | (148) |
Capital lease obligations, noncurrent | $ 235 |
Lease Obligations - Schedule of Future Minimum Rental Payments for Operating Leases (Details) $ in Millions |
Dec. 31, 2015
USD ($)
|
---|---|
Operating Leased Assets | |
Operating leases, future minimum payments due in 2016 | $ 1,583 |
Operating leases, future minimum payments due in 2017 | 1,440 |
Operating leases, future minimum payments due in 2018 | 1,307 |
Operating leases, future minimum payments due in 2019 | 1,158 |
Operating leases, future minimum payments due in 2020 | 1,053 |
Operating leases, future minimum payments due thereafter | 6,220 |
Total minimum lease payments | 12,761 |
Delta Lease Payments | |
Operating Leased Assets | |
Operating leases, future minimum payments due in 2016 | 1,258 |
Operating leases, future minimum payments due in 2017 | 1,105 |
Operating leases, future minimum payments due in 2018 | 993 |
Operating leases, future minimum payments due in 2019 | 899 |
Operating leases, future minimum payments due in 2020 | 814 |
Operating leases, future minimum payments due thereafter | 5,839 |
Total minimum lease payments | 10,908 |
Contract Carrier Aircraft Lease Payments | |
Operating Leased Assets | |
Operating leases, future minimum payments due in 2016 | 325 |
Operating leases, future minimum payments due in 2017 | 335 |
Operating leases, future minimum payments due in 2018 | 314 |
Operating leases, future minimum payments due in 2019 | 259 |
Operating leases, future minimum payments due in 2020 | 239 |
Operating leases, future minimum payments due thereafter | 381 |
Total minimum lease payments | $ 1,853 |
Lease Obligations - Narrative (Details) - USD ($) $ in Millions |
12 Months Ended | |||
---|---|---|---|---|
Dec. 31, 2015 |
Dec. 31, 2014 |
Dec. 31, 2013 |
Dec. 31, 2010 |
|
Leases [Abstract] | ||||
Operating leases, rent expense | $ 1,200 | $ 1,200 | $ 1,100 | |
Special Project Bonds Face Amount | $ 800 | |||
Construction in Progress, Gross | 748 | |||
Construction obligation | $ 748 |
American Express Relationship - Narrative (Details) - USD ($) |
12 Months Ended | ||||
---|---|---|---|---|---|
Dec. 31, 2014 |
Dec. 31, 2013 |
Dec. 31, 2012 |
Dec. 31, 2011 |
Dec. 31, 2015 |
|
Deferred revenue, additions | $ 675,000,000 | $ 675,000,000 | $ 675,000,000 | $ 675,000,000 | |
Fuel card obligation | |||||
Line of credit facility, maximum borrowing capacity | $ 612,000,000 | ||||
Fuel card obligation | $ 561,000,000 | $ 221,000,000 |
Employee Benefit Plans - Fair Value of Plan Assets and Funded Status (Details) - USD ($) $ in Millions |
12 Months Ended | ||
---|---|---|---|
Dec. 31, 2015 |
Dec. 31, 2014 |
Dec. 31, 2013 |
|
Defined Benefit Plan, Change in Benefit Obligation | |||
Actuarial (gain) loss | $ (1,100) | $ 3,300 | |
Defined Benefit Plan, Change in Fair Value of Plan Assets | |||
Defined Benefit Plan, Fair Value of Plan Assets Period Start | 10,351 | ||
Defined Benefit Plan, Fair Value of Plan Assets period End | 10,030 | 10,351 | |
Pension Benefits | |||
Defined Benefit Plan, Change in Benefit Obligation | |||
Defined benefit plan, benefit obligation period start | 21,856 | 19,060 | |
Service cost | 0 | 0 | $ 0 |
Interest cost | 884 | 928 | 861 |
Actuarial (gain) loss | (1,061) | 2,923 | |
Benefits paid, including lump sums and annuities | (1,059) | (1,055) | |
Participant contributions | 0 | 0 | |
Settlements | (9) | 0 | |
Defined benefit plan, benefit obligation period end | 20,611 | 21,856 | 19,060 |
Defined Benefit Plan, Change in Fair Value of Plan Assets | |||
Defined Benefit Plan, Fair Value of Plan Assets Period Start | 9,355 | 8,937 | |
Actual (loss) gain on plan assets | (132) | 556 | |
Employer contributions | 1,219 | 917 | |
Participant contributions | 0 | 0 | |
Benefits paid, including lump sums and annuities | (1,059) | (1,055) | |
Settlements | (9) | 0 | |
Defined Benefit Plan, Fair Value of Plan Assets period End | 9,374 | 9,355 | 8,937 |
Defined Benefit Plan, Funded Status of Plan | |||
Defined Benefit Plan, Funded Status of Plan | (11,237) | (12,501) | |
Other Postretirement and Postemployment Benefits | |||
Defined Benefit Plan, Change in Benefit Obligation | |||
Defined benefit plan, benefit obligation period start | 3,487 | 3,205 | |
Service cost | 62 | 52 | 49 |
Interest cost | 141 | 155 | 143 |
Actuarial (gain) loss | (88) | 338 | |
Benefits paid, including lump sums and annuities | (302) | (307) | |
Participant contributions | 36 | 44 | |
Settlements | 0 | 0 | |
Defined benefit plan, benefit obligation period end | 3,336 | 3,487 | 3,205 |
Defined Benefit Plan, Change in Fair Value of Plan Assets | |||
Defined Benefit Plan, Fair Value of Plan Assets Period Start | 982 | 1,043 | |
Actual (loss) gain on plan assets | (25) | 57 | |
Employer contributions | 210 | 160 | |
Participant contributions | 36 | 44 | |
Benefits paid, including lump sums and annuities | (319) | (322) | |
Settlements | 0 | 0 | |
Defined Benefit Plan, Fair Value of Plan Assets period End | 884 | 982 | $ 1,043 |
Defined Benefit Plan, Funded Status of Plan | |||
Defined Benefit Plan, Funded Status of Plan | $ (2,452) | $ (2,505) |
Employee Benefit Plans - Balance Sheet Position (Details) - USD ($) $ in Millions |
Dec. 31, 2015 |
Dec. 31, 2014 |
---|---|---|
Pension and Other Postretirement Defined Benefit Plans, Liabilities | ||
Noncurrent liabilities | $ (13,855) | $ (15,138) |
Pension Benefits | ||
Pension and Other Postretirement Defined Benefit Plans, Liabilities | ||
Current liabilities | (27) | (28) |
Noncurrent liabilities | (11,210) | (12,473) |
Total liabilities | (11,237) | (12,501) |
Other Comprehensive Income (Loss), Pension and Other Postretirement Benefit Plans, Adjustment, before Tax | ||
Net actuarial loss | (8,124) | (8,409) |
Prior service credit | 0 | 0 |
Total accumulated other comprehensive loss, pre-tax | (8,124) | (8,409) |
Other Postretirement and Postemployment Benefits | ||
Pension and Other Postretirement Defined Benefit Plans, Liabilities | ||
Current liabilities | (139) | (139) |
Noncurrent liabilities | (2,313) | (2,366) |
Total liabilities | (2,452) | (2,505) |
Other Comprehensive Income (Loss), Pension and Other Postretirement Benefit Plans, Adjustment, before Tax | ||
Net actuarial loss | (458) | (465) |
Prior service credit | 109 | 135 |
Total accumulated other comprehensive loss, pre-tax | $ (349) | $ (330) |
Employee Benefit Plans - Net Periodic Cost (Details) - USD ($) $ in Millions |
12 Months Ended | ||
---|---|---|---|
Dec. 31, 2015 |
Dec. 31, 2014 |
Dec. 31, 2013 |
|
Pension Benefits | |||
Defined Benefit Plan Disclosure | |||
Service cost | $ 0 | $ 0 | $ 0 |
Interest cost | 884 | 928 | 861 |
Expected return on plan assets | (879) | (829) | (734) |
Amortization of prior service credit | 0 | 0 | 0 |
Recognized net actuarial loss | 232 | 134 | 221 |
Settlements | 3 | 0 | 6 |
Net periodic cost | 240 | 233 | 354 |
Defined contribution plan costs | 592 | 551 | 490 |
Total cost | 832 | 784 | 844 |
Other Postretirement and Postemployment Benefits | |||
Defined Benefit Plan Disclosure | |||
Service cost | 62 | 52 | 49 |
Interest cost | 141 | 155 | 143 |
Expected return on plan assets | (81) | (84) | (84) |
Amortization of prior service credit | (26) | (26) | (26) |
Recognized net actuarial loss | 24 | 4 | 25 |
Settlements | 0 | 0 | 0 |
Net periodic cost | 120 | 101 | 107 |
Defined contribution plan costs | 0 | 0 | 0 |
Total cost | $ 120 | $ 101 | $ 107 |
Employee Benefit Plans - Schedule of Assumptions Used (Details) |
12 Months Ended | ||
---|---|---|---|
Dec. 31, 2015
Rate
|
Dec. 31, 2014 |
Dec. 31, 2013 |
|
Defined Benefit Plan Disclosure | |||
Weighted average discount rate | 4.57% | 4.14% | |
Weighted average expected long-term rate of return on plan assets | 9.00% | ||
Assumed healthcare cost and trend rate | 7.00% | 7.00% | 7.00% |
Pension Benefits | |||
Defined Benefit Plan Disclosure | |||
Weighted average discount rate | 4.13% | 4.99% | 4.10% |
Other Postretirement and Postemployment Benefits | |||
Defined Benefit Plan Disclosure | |||
Weighted average discount rate | 4.13% | 4.88% | 4.00% |
Other Pension Plans, Postretirement or Supplemental Plans, Defined Benefit | |||
Defined Benefit Plan Disclosure | |||
Weighted average discount rate | 4.13% | 5.00% | 4.13% |
Weighted average expected long-term rate of return on plan assets | 8.94% | 8.94% | 8.94% |
Employee Benefit Plans - Schedule of Health Care Cost Trend Rates (Details) - Other Postretirement and Postemployment Benefits $ in Millions |
12 Months Ended |
---|---|
Dec. 31, 2015
USD ($)
| |
Defined Benefit Plan, Effect of One-Percentage Point Change in Assumed Health Care Cost Trend Rates | |
Defined Benefit Plan, Effect of One Percentage Point Increase on Service and Interest Cost Components | $ 1 |
Defined Benefit Plan, Effect of One Percentage Point Decrease on Service and Interest Cost Components | (1) |
Defined Benefit Plan, Effect of One Percentage Point Increase on Accumulated Postretirement Benefit Obligation | 12 |
Defined Benefit Plan, Effect of One Percentage Point Decrease on Accumulated Postretirement Benefit Obligation | $ (25) |
Employee Benefit Plans - Schedule of Expected Benefit Payments (Details) $ in Millions |
Dec. 31, 2015
USD ($)
|
---|---|
Pension Benefits | |
Defined Benefit Plan, Expected Future Benefit Payments, Fiscal Year Maturity | |
2016 | $ 1,154 |
2017 | 1,158 |
2018 | 1,180 |
2019 | 1,199 |
2020 | 1,219 |
2021-2025 | 6,343 |
Other Postretirement and Postemployment Benefits | |
Defined Benefit Plan, Expected Future Benefit Payments, Fiscal Year Maturity | |
2016 | 286 |
2017 | 281 |
2018 | 271 |
2019 | 267 |
2020 | 268 |
2021-2025 | $ 1,335 |
Employee Benefit Plans - Schedule of Benefits Measured at Fair Value (Details) - USD ($) $ in Millions |
Dec. 31, 2015 |
Dec. 31, 2014 |
---|---|---|
Defined Benefit Plan, Funded Status of Plan | ||
Defined Benefit Plan, Fair Value of Plan Assets | $ 10,030 | $ 10,351 |
Level 1 | ||
Defined Benefit Plan, Funded Status of Plan | ||
Defined Benefit Plan, Fair Value of Plan Assets | 2,083 | 752 |
Level 2 | ||
Defined Benefit Plan, Funded Status of Plan | ||
Defined Benefit Plan, Fair Value of Plan Assets | 2,753 | 5,001 |
Level 3 | ||
Defined Benefit Plan, Funded Status of Plan | ||
Defined Benefit Plan, Fair Value of Plan Assets | 5,194 | 4,598 |
Equities and equity-related instruments | ||
Defined Benefit Plan, Funded Status of Plan | ||
Defined Benefit Plan, Fair Value of Plan Assets | 2,218 | 2,185 |
Equities and equity-related instruments | Level 1 | ||
Defined Benefit Plan, Funded Status of Plan | ||
Defined Benefit Plan, Fair Value of Plan Assets | 2,067 | 699 |
Equities and equity-related instruments | Level 2 | ||
Defined Benefit Plan, Funded Status of Plan | ||
Defined Benefit Plan, Fair Value of Plan Assets | 50 | 1,486 |
Equities and equity-related instruments | Level 3 | ||
Defined Benefit Plan, Funded Status of Plan | ||
Defined Benefit Plan, Fair Value of Plan Assets | 101 | 0 |
Sovereign fixed income | ||
Defined Benefit Plan, Funded Status of Plan | ||
Defined Benefit Plan, Fair Value of Plan Assets | 86 | 0 |
Sovereign fixed income | Level 1 | ||
Defined Benefit Plan, Funded Status of Plan | ||
Defined Benefit Plan, Fair Value of Plan Assets | 8 | 0 |
Sovereign fixed income | Level 2 | ||
Defined Benefit Plan, Funded Status of Plan | ||
Defined Benefit Plan, Fair Value of Plan Assets | 78 | 0 |
Sovereign fixed income | Level 3 | ||
Defined Benefit Plan, Funded Status of Plan | ||
Defined Benefit Plan, Fair Value of Plan Assets | 0 | 0 |
Credit-related fixed income | ||
Defined Benefit Plan, Funded Status of Plan | ||
Defined Benefit Plan, Fair Value of Plan Assets | 858 | 594 |
Credit-related fixed income | Level 1 | ||
Defined Benefit Plan, Funded Status of Plan | ||
Defined Benefit Plan, Fair Value of Plan Assets | 0 | 0 |
Credit-related fixed income | Level 2 | ||
Defined Benefit Plan, Funded Status of Plan | ||
Defined Benefit Plan, Fair Value of Plan Assets | 761 | 470 |
Credit-related fixed income | Level 3 | ||
Defined Benefit Plan, Funded Status of Plan | ||
Defined Benefit Plan, Fair Value of Plan Assets | 97 | 124 |
Other fixed income | ||
Defined Benefit Plan, Funded Status of Plan | ||
Defined Benefit Plan, Fair Value of Plan Assets | 174 | 635 |
Other fixed income | Level 1 | ||
Defined Benefit Plan, Funded Status of Plan | ||
Defined Benefit Plan, Fair Value of Plan Assets | 8 | 18 |
Other fixed income | Level 2 | ||
Defined Benefit Plan, Funded Status of Plan | ||
Defined Benefit Plan, Fair Value of Plan Assets | 143 | 617 |
Other fixed income | Level 3 | ||
Defined Benefit Plan, Funded Status of Plan | ||
Defined Benefit Plan, Fair Value of Plan Assets | 23 | 0 |
Private equity | ||
Defined Benefit Plan, Funded Status of Plan | ||
Defined Benefit Plan, Fair Value of Plan Assets | 1,030 | 1,213 |
Private equity | Level 1 | ||
Defined Benefit Plan, Funded Status of Plan | ||
Defined Benefit Plan, Fair Value of Plan Assets | 0 | 0 |
Private equity | Level 2 | ||
Defined Benefit Plan, Funded Status of Plan | ||
Defined Benefit Plan, Fair Value of Plan Assets | 0 | 0 |
Private equity | Level 3 | ||
Defined Benefit Plan, Funded Status of Plan | ||
Defined Benefit Plan, Fair Value of Plan Assets | 1,030 | 1,213 |
Real assets | ||
Defined Benefit Plan, Funded Status of Plan | ||
Defined Benefit Plan, Fair Value of Plan Assets | 635 | 663 |
Real assets | Level 1 | ||
Defined Benefit Plan, Funded Status of Plan | ||
Defined Benefit Plan, Fair Value of Plan Assets | 0 | 0 |
Real assets | Level 2 | ||
Defined Benefit Plan, Funded Status of Plan | ||
Defined Benefit Plan, Fair Value of Plan Assets | 0 | 0 |
Real assets | Level 3 | ||
Defined Benefit Plan, Funded Status of Plan | ||
Defined Benefit Plan, Fair Value of Plan Assets | 635 | 663 |
Hedge Funds | ||
Defined Benefit Plan, Funded Status of Plan | ||
Defined Benefit Plan, Fair Value of Plan Assets | 2,990 | 2,245 |
Hedge Funds | Level 1 | ||
Defined Benefit Plan, Funded Status of Plan | ||
Defined Benefit Plan, Fair Value of Plan Assets | 0 | 31 |
Hedge Funds | Level 2 | ||
Defined Benefit Plan, Funded Status of Plan | ||
Defined Benefit Plan, Fair Value of Plan Assets | 19 | 0 |
Hedge Funds | Level 3 | ||
Defined Benefit Plan, Funded Status of Plan | ||
Defined Benefit Plan, Fair Value of Plan Assets | 2,971 | 2,214 |
Cash equivalents | ||
Defined Benefit Plan, Funded Status of Plan | ||
Defined Benefit Plan, Fair Value of Plan Assets | 1,700 | 2,432 |
Cash equivalents | Level 1 | ||
Defined Benefit Plan, Funded Status of Plan | ||
Defined Benefit Plan, Fair Value of Plan Assets | 0 | 4 |
Cash equivalents | Level 2 | ||
Defined Benefit Plan, Funded Status of Plan | ||
Defined Benefit Plan, Fair Value of Plan Assets | 1,700 | 2,428 |
Cash equivalents | Level 3 | ||
Defined Benefit Plan, Funded Status of Plan | ||
Defined Benefit Plan, Fair Value of Plan Assets | 0 | 0 |
Other | ||
Defined Benefit Plan, Funded Status of Plan | ||
Defined Benefit Plan, Fair Value of Plan Assets | 339 | 384 |
Other | Level 1 | ||
Defined Benefit Plan, Funded Status of Plan | ||
Defined Benefit Plan, Fair Value of Plan Assets | 0 | 0 |
Other | Level 2 | ||
Defined Benefit Plan, Funded Status of Plan | ||
Defined Benefit Plan, Fair Value of Plan Assets | 2 | 0 |
Other | Level 3 | ||
Defined Benefit Plan, Funded Status of Plan | ||
Defined Benefit Plan, Fair Value of Plan Assets | $ 337 | $ 384 |
Employee Benefit Plans - Schedule of Assets Measured, Unobservable Input Reconciliation (Details) - USD ($) $ in Millions |
12 Months Ended | |
---|---|---|
Dec. 31, 2015 |
Dec. 31, 2014 |
|
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation | ||
Beginning Balance | $ 4,598 | $ 2,665 |
Purchases, sales and settlements, net | 474 | 1,764 |
Ending Balance | 5,194 | 4,598 |
Private Equity | ||
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation | ||
Beginning Balance | 1,213 | 1,366 |
Purchases, sales and settlements, net | (282) | (144) |
Ending Balance | 1,030 | 1,213 |
Real Estate | ||
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation | ||
Beginning Balance | 663 | 688 |
Purchases, sales and settlements, net | (47) | (23) |
Ending Balance | 635 | 663 |
Hedge Funds | ||
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation | ||
Beginning Balance | 2,214 | 552 |
Purchases, sales and settlements, net | 702 | 1,457 |
Ending Balance | 2,971 | 2,214 |
Fixed Income | ||
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation | ||
Beginning Balance | 124 | 59 |
Purchases, sales and settlements, net | 9 | 81 |
Ending Balance | 120 | 124 |
Other | ||
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation | ||
Beginning Balance | 384 | 0 |
Purchases, sales and settlements, net | 92 | 393 |
Ending Balance | 438 | 384 |
Related to assets still held at the reporting date | ||
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation | ||
Change in plan asset | (237) | (14) |
Related to assets still held at the reporting date | Private Equity | ||
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation | ||
Change in plan asset | (148) | (116) |
Related to assets still held at the reporting date | Real Estate | ||
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation | ||
Change in plan asset | (50) | (39) |
Related to assets still held at the reporting date | Hedge Funds | ||
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation | ||
Change in plan asset | 22 | 167 |
Related to assets still held at the reporting date | Fixed Income | ||
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation | ||
Change in plan asset | (22) | (17) |
Related to assets still held at the reporting date | Other | ||
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation | ||
Change in plan asset | (39) | (9) |
Related to assets sold during the period | ||
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation | ||
Change in plan asset | 359 | 183 |
Related to assets sold during the period | Private Equity | ||
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation | ||
Change in plan asset | 247 | 107 |
Related to assets sold during the period | Real Estate | ||
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation | ||
Change in plan asset | 69 | 37 |
Related to assets sold during the period | Hedge Funds | ||
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation | ||
Change in plan asset | 33 | 38 |
Related to assets sold during the period | Fixed Income | ||
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation | ||
Change in plan asset | 9 | 1 |
Related to assets sold during the period | Other | ||
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation | ||
Change in plan asset | $ 1 | $ 0 |
Employee Benefit Plans - Narrative (Details) - USD ($) |
12 Months Ended | ||
---|---|---|---|
Dec. 31, 2015 |
Dec. 31, 2014 |
Dec. 31, 2013 |
|
Defined Benefit Plan Disclosure | |||
Defined benefit plan, other information | 8.85% | ||
Assumed Health care plan pre age | 65 years | ||
Assumed Health care plan post age | 65 years | ||
Defined benefit plan, Actuarial gain (loss) | $ 1,100,000,000 | $ (3,300,000,000) | |
Pension and other postretirement benefit plans, amounts that will be amortized from accumulated other comprehensive income (loss) in next fiscal year | $ 231,000,000 | ||
Defined benefit plan, description of direction and pattern of change for assumed health care cost trend rate | 0.05 | ||
Defined Benefit Plan, Ultimate Health Care Cost Trend Rate | 1.00% | ||
Weighted average expected long-term rate of return on plan assets | 9.00% | ||
Profit sharing threshold | $ 2,500,000,000.0 | ||
Profit sharing | 1,490,000,000 | 1,085,000,000 | $ 506,000,000 |
Other Postretirement and Postemployment Benefits | |||
Defined Benefit Plan Disclosure | |||
Defined benefit plan, estimated future employer contributions in next fiscal year | 1,000,000,000 | ||
Contributions above minimum | 500,000,000 | ||
Defined benefit plan, Actuarial gain (loss) | $ 88,000,000 | $ (338,000,000) | |
Minimum | Growth-seeking assets | |||
Defined Benefit Plan Disclosure | |||
Defined benefit plan, target plan asset allocations | 40.00% | ||
Minimum | Income-generating assets | |||
Defined Benefit Plan Disclosure | |||
Defined benefit plan, target plan asset allocations | 20.00% | ||
Minimum | Risk-diversifying assets | |||
Defined Benefit Plan Disclosure | |||
Defined benefit plan, target plan asset allocations | 25.00% | ||
Maximum | Growth-seeking assets | |||
Defined Benefit Plan Disclosure | |||
Defined benefit plan, target plan asset allocations | 50.00% | ||
Maximum | Income-generating assets | |||
Defined Benefit Plan Disclosure | |||
Defined benefit plan, target plan asset allocations | 30.00% | ||
Maximum | Risk-diversifying assets | |||
Defined Benefit Plan Disclosure | |||
Defined benefit plan, target plan asset allocations | 30.00% |
Commitments and Contingencies - Aircraft Purchase and Lease Commitments (Details) $ in Millions |
Dec. 31, 2015
USD ($)
|
---|---|
Capital addition purchase commitments | |
Unrecorded Unconditional Purchase Obligation | |
2016 | $ 2,140 |
2017 | 2,500 |
2018 | 2,510 |
2019 | 1,500 |
2020 | 1,900 |
Thereafter | 3,010 |
Total | 13,560 |
Airline capacity purchase arrangements | |
Unrecorded Unconditional Purchase Obligation | |
2016 | 2,160 |
2017 | 2,270 |
2018 | 2,110 |
2019 | 1,960 |
2020 | 1,650 |
Thereafter | 2,170 |
Total | $ 12,320 |
Commitments and Contingencies - Employee Under Collective Bargaining Agreements (Details) |
Dec. 31, 2015
employee
|
---|---|
Entity number of employees | 83,000 |
Delta Pilots | |
Entity number of employees | 12,080 |
Delta Flight Superintendents (Dispatchers) | |
Entity number of employees | 400 |
Endeavor Pilots | |
Entity number of employees | 1,360 |
Endeavor Flight Attendants | |
Entity number of employees | 895 |
Endeavor Air Dispatchers | |
Entity number of employees | 50 |
Commitments and Contingencies - Narrative (Details) $ in Millions |
12 Months Ended |
---|---|
Dec. 31, 2015
USD ($)
Rate
employee
obligation
| |
Unrecorded Unconditional Purchase Obligation | |
Terms of aircraft lease | the lease would have (1) a rate equal to the aircraft-related debt payments of Shuttle America as if 90% of the aircraft was financed by Shuttle America and (2) other specified terms and conditions |
Rate of interest on the equity to be paid on exercising put right | 10.00% |
Entity number of employees | employee | 83,000 |
Percentage of employees represented by unions under collective bargaining agreements | 18.00% |
Refinery employees | |
Unrecorded Unconditional Purchase Obligation | |
Entity number of employees | employee | 209 |
Venezuelan bolívar fuerte | |
Unrecorded Unconditional Purchase Obligation | |
Official exchange rate set by government | Rate | 200 |
Foreign currency transactions loss | $ | $ 72 |
Capital addition purchase commitments | |
Unrecorded Unconditional Purchase Obligation | |
Aircraft purchase commitments, total | $ | $ 13,560 |
B-737-900 | |
Unrecorded Unconditional Purchase Obligation | |
Unrecorded unconditional purchase obligation, minimum quantity required | 70 |
A321-200 | |
Unrecorded Unconditional Purchase Obligation | |
Unrecorded unconditional purchase obligation, minimum quantity required | 45 |
A330-900 NEO | |
Unrecorded Unconditional Purchase Obligation | |
Unrecorded unconditional purchase obligation, minimum quantity required | 25 |
A350-900 | |
Unrecorded Unconditional Purchase Obligation | |
Unrecorded unconditional purchase obligation, minimum quantity required | 25 |
E190-100 | |
Unrecorded Unconditional Purchase Obligation | |
Unrecorded unconditional purchase obligation, minimum quantity required | 19 |
B-737-800 | |
Unrecorded Unconditional Purchase Obligation | |
Unrecorded unconditional purchase obligation, minimum quantity required | 18 |
A330-300 | |
Unrecorded Unconditional Purchase Obligation | |
Unrecorded unconditional purchase obligation, minimum quantity required | 6 |
EMB-145 | |
Unrecorded Unconditional Purchase Obligation | |
Aircraft put right | $ | $ 90 |
Embraer 170/175 | |
Unrecorded Unconditional Purchase Obligation | |
Aircraft put right | $ | $ 184 |
B-717-200 | |
Unrecorded Unconditional Purchase Obligation | |
Unrecorded unconditional purchase obligation, minimum quantity required | 88 |
Income Taxes - Income Tax Benefit (Provision) (Details) - USD ($) $ in Millions |
12 Months Ended | ||
---|---|---|---|
Dec. 31, 2015 |
Dec. 31, 2014 |
Dec. 31, 2013 |
|
Current tax (provision) benefit: | |||
Federal | $ (23) | $ 21 | $ 24 |
State and local | (25) | (9) | (3) |
International | (2) | (11) | 1 |
Deferred tax (provision) benefit: | |||
Federal | (2,409) | (424) | 7,197 |
State and local | (172) | 10 | 794 |
Income Tax (Provision) Benefit | $ (2,631) | $ (413) | $ 8,013 |
Income Taxes - Effective Income Tax Rate Reconciliation (Details) |
12 Months Ended | ||
---|---|---|---|
Dec. 31, 2015 |
Dec. 31, 2014 |
Dec. 31, 2013 |
|
Effective Income Tax Rate Reconciliation, Percent | |||
U.S. federal statutory income tax rate | 35.00% | 35.00% | 35.00% |
State taxes, net of federal benefit | 1.80% | 2.00% | 3.00% |
Decrease in valuation allowance | (0.20%) | (2.40%) | (367.50%) |
Income tax allocation | 0.00% | 0.00% | 12.70% |
Other Adjustments | 0.20% | 3.90% | (0.40%) |
Effective Income Tax Rate | 36.80% | 38.50% | (317.20%) |
Income Taxes - Deferred Taxes (Details) - USD ($) $ in Millions |
Dec. 31, 2015 |
Dec. 31, 2014 |
Dec. 31, 2013 |
Dec. 31, 2012 |
---|---|---|---|---|
Deferred tax assets: | ||||
Net operating loss carryforwards | $ 3,838 | $ 4,782 | ||
Pension, postretirement and other benefits | 5,444 | 6,033 | ||
Fuel derivatives MTM adjustments | 282 | 777 | ||
AMT credit carryforward | 379 | 357 | ||
Deferred revenue | 1,522 | 1,824 | ||
Other | 1,047 | 659 | ||
Valuation allowance | (56) | (46) | $ (177) | $ (10,963) |
Total deferred tax assets | 12,456 | 14,386 | ||
Deferred tax liabilities: | ||||
Depreciation | 5,490 | 4,663 | ||
Intangible assets | 1,681 | 1,684 | ||
Other | 329 | 444 | ||
Total deferred tax liabilities | 7,500 | 6,791 | ||
Net deferred tax assets | $ 4,956 | $ 7,595 |
Income Taxes - Valuation Allowance (Details) - USD ($) $ in Millions |
12 Months Ended | ||
---|---|---|---|
Dec. 31, 2015 |
Dec. 31, 2014 |
Dec. 31, 2013 |
|
Valuation Allowance | |||
Valuation allowance at beginning of period | $ 46 | $ 177 | $ 10,963 |
Valuation allowance at end of period | 56 | 46 | 177 |
Income tax provision | |||
Valuation Allowance | |||
Increase (decrease) in valuation allowance | 0 | (9) | (975) |
Other comprehensive income tax benefit (provision) | |||
Valuation Allowance | |||
Increase (decrease) in valuation allowance | 24 | (3) | (1,186) |
Expirations | |||
Valuation Allowance | |||
Increase (decrease) in valuation allowance | (4) | (91) | 0 |
Release of valuation allowance | |||
Valuation Allowance | |||
Increase (decrease) in valuation allowance | (10) | (28) | (8,310) |
Other | |||
Valuation Allowance | |||
Increase (decrease) in valuation allowance | $ 0 | $ 0 | $ (315) |
Income Taxes - Narrative (Details) - USD ($) $ in Millions |
12 Months Ended | |||
---|---|---|---|---|
Dec. 31, 2015 |
Dec. 31, 2014 |
Dec. 31, 2013 |
Dec. 31, 2012 |
|
Valuation Allowance [Line Items] | ||||
AMT credit carryforward | $ 379 | $ 357 | ||
Operating loss carryforwards | $ 9,500 | |||
Operating loss carryforwards, expiration dates | Jan. 01, 2024 | |||
Valuation allowance | $ 56 | 46 | $ 177 | $ 10,963 |
Income before income taxes | 7,157 | 1,072 | 2,527 | |
Income tax benefit related to tax allocation | 1,900 | |||
Deferred income taxes | 1,900 | |||
Income tax expense related to tax allocation | 321 | |||
Unrecognized tax benefits | 32 | 40 | 37 | |
Release of valuation allowance | ||||
Valuation Allowance [Line Items] | ||||
Increase (decrease) in valuation allowance | $ (10) | $ (28) | $ (8,310) |
Equity and Equity Compensation - Narrative (Details) - USD ($) |
12 Months Ended | ||
---|---|---|---|
Dec. 31, 2015 |
Dec. 31, 2014 |
Dec. 31, 2013 |
|
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | |||
Capital stock shares authorized | 2,000,000,000.0 | ||
Common stock, shares authorized | 1,500,000,000 | 1,500,000,000 | |
Common stock, par value (usd per share) | $ 0.0001 | $ 0.0001 | |
Preferred stock, shares authorized | 500,000,000 | ||
Treasury stock acquired, weighted average cost per share | $ 17.70 | $ 15.82 | |
Share-based compensation arrangement by share-based payment award, number of shares authorized | 157,000,000 | ||
Common Stock, capital shares reserved for future issuance | 27,000,000 | ||
Share-based compensation | $ 76,000,000 | $ 81,000,000 | $ 90,000,000 |
Employee service share-based compensation, nonvested awards, compensation cost not yet recognized | $ 61,000,000 | ||
Share-based compensation arrangement by share-based payment award, equity instruments other than options, nonvested, shares | 2,500,000 | ||
Share-based compensation arrangement by share-based payment award, options, outstanding, shares | 5,300,000 | ||
Share-based compensation arrangement by share-based payment award, options, exercisable, weighted average exercise price | $ 15.05 | ||
Share-based compensation arrangement by share-based payment award, options, exercisable, shares | 4,600,000 | ||
Employee service share-based compensation, tax benefit from compensation expense | $ 0 | $ 0 | $ 0 |
Accumulated Other Comprehensive Loss (Details) - USD ($) $ in Millions |
12 Months Ended | ||
---|---|---|---|
Dec. 31, 2015 |
Dec. 31, 2014 |
Dec. 31, 2013 |
|
AOCI Attributable to Parent, Net of Tax | |||
Accumulated other comprehensive income (loss), total, beginning balance | $ (7,311) | $ (5,130) | $ (8,577) |
Change in value ( net of tax effect) | 8 | (2,174) | 3,037 |
Reclassification into earnings (net of tax effect) | 28 | (7) | 410 |
Accumulated other comprehensive income (loss), total, ending balance | (7,275) | (7,311) | (5,130) |
Non cash income tax expense recorded in other comprehensive income | 16 | 4 | 321 |
Other comprehensive income, tax effect | 41 | 1,276 | 0 |
Pension and Other Benefits Liabilities | |||
AOCI Attributable to Parent, Net of Tax | |||
Accumulated other comprehensive income (loss), total, beginning balance | (7,517) | (5,323) | (8,307) |
Change in value ( net of tax effect) | 10 | (2,267) | 2,760 |
Reclassification into earnings (net of tax effect) | 153 | 73 | 224 |
Accumulated other comprehensive income (loss), total, ending balance | (7,354) | (7,517) | (5,323) |
Deferred income taxes, pension obligation | 1,900 | ||
Derivative Contracts | |||
AOCI Attributable to Parent, Net of Tax | |||
Accumulated other comprehensive income (loss), total, beginning balance | 222 | 219 | (263) |
Change in value ( net of tax effect) | 43 | 83 | 296 |
Reclassification into earnings (net of tax effect) | (125) | (80) | 186 |
Accumulated other comprehensive income (loss), total, ending balance | 140 | 222 | 219 |
Non cash income tax expense recorded in other comprehensive income | 321 | ||
Investments | |||
AOCI Attributable to Parent, Net of Tax | |||
Accumulated other comprehensive income (loss), total, beginning balance | (16) | (26) | (7) |
Change in value ( net of tax effect) | (45) | 10 | (19) |
Reclassification into earnings (net of tax effect) | 0 | 0 | 0 |
Accumulated other comprehensive income (loss), total, ending balance | $ (61) | $ (16) | $ (26) |
Segments & Geographic Information - Schedule of Segment Reporting Information (Details) - USD ($) $ in Millions |
3 Months Ended | 12 Months Ended | |||||||||
---|---|---|---|---|---|---|---|---|---|---|---|
Dec. 31, 2015 |
Sep. 30, 2015 |
Jun. 30, 2015 |
Mar. 31, 2015 |
Dec. 31, 2014 |
Sep. 30, 2014 |
Jun. 30, 2014 |
Mar. 31, 2014 |
Dec. 31, 2015 |
Dec. 31, 2014 |
Dec. 31, 2013 |
|
Segment Reporting Information, Profit (Loss) | |||||||||||
Operating revenue | $ 9,502 | $ 11,107 | $ 10,707 | $ 9,388 | $ 9,647 | $ 11,178 | $ 10,621 | $ 8,916 | $ 40,704 | $ 40,362 | $ 37,773 |
Operating income | 1,717 | $ 2,213 | $ 2,474 | $ 1,398 | (828) | $ 835 | $ 1,579 | $ 620 | 7,802 | 2,206 | 3,400 |
Interest expense, net | 481 | 650 | 852 | ||||||||
Depreciation and amortization | 1,835 | 1,771 | 1,658 | ||||||||
Total assets | 53,134 | 54,005 | 53,134 | 54,005 | 52,104 | ||||||
Capital expenditures | 2,945 | 2,249 | 2,568 | ||||||||
Sales to airline segment | Intersegment Sales/Other | |||||||||||
Segment Reporting Information, Profit (Loss) | |||||||||||
Operating revenue | 990 | 1,313 | 1,156 | ||||||||
Exchanged products | Intersegment Sales/Other | |||||||||||
Segment Reporting Information, Profit (Loss) | |||||||||||
Operating revenue | 3,108 | 5,104 | 5,352 | ||||||||
Sales of refined products to third parties | Intersegment Sales/Other | |||||||||||
Segment Reporting Information, Profit (Loss) | |||||||||||
Operating revenue | 337 | 397 | 495 | ||||||||
Airline | Operating Segments | |||||||||||
Segment Reporting Information, Profit (Loss) | |||||||||||
Operating revenue | 40,398 | 40,217 | 37,773 | ||||||||
Operating income | 7,512 | 2,110 | 3,516 | ||||||||
Interest expense, net | 481 | 650 | 852 | ||||||||
Depreciation and amortization | 1,805 | 1,745 | 1,641 | ||||||||
Total assets | 51,785 | 52,896 | 51,785 | 52,896 | 50,932 | ||||||
Capital expenditures | 2,853 | 2,184 | 2,516 | ||||||||
Refinery | Operating Segments | |||||||||||
Segment Reporting Information, Profit (Loss) | |||||||||||
Operating revenue | 4,741 | 6,959 | 7,003 | ||||||||
Operating income | 290 | 96 | (116) | ||||||||
Interest expense, net | 0 | 0 | 0 | ||||||||
Depreciation and amortization | 30 | 26 | 17 | ||||||||
Total assets | $ 1,349 | $ 1,109 | 1,349 | 1,109 | 1,172 | ||||||
Capital expenditures | $ 92 | $ 65 | $ 52 |
Segments & Geographic Information - Geographic Information (Details) - USD ($) $ in Millions |
3 Months Ended | 12 Months Ended | |||||||||
---|---|---|---|---|---|---|---|---|---|---|---|
Dec. 31, 2015 |
Sep. 30, 2015 |
Jun. 30, 2015 |
Mar. 31, 2015 |
Dec. 31, 2014 |
Sep. 30, 2014 |
Jun. 30, 2014 |
Mar. 31, 2014 |
Dec. 31, 2015 |
Dec. 31, 2014 |
Dec. 31, 2013 |
|
Revenues | |||||||||||
Operating revenue | $ 9,502 | $ 11,107 | $ 10,707 | $ 9,388 | $ 9,647 | $ 11,178 | $ 10,621 | $ 8,916 | $ 40,704 | $ 40,362 | $ 37,773 |
Domestic | Operating Segments | |||||||||||
Revenues | |||||||||||
Operating revenue | 27,884 | 26,898 | 24,857 | ||||||||
Atlantic | Operating Segments | |||||||||||
Revenues | |||||||||||
Operating revenue | 6,505 | 6,757 | 6,446 | ||||||||
Pacific | Operating Segments | |||||||||||
Revenues | |||||||||||
Operating revenue | 3,503 | 3,948 | 4,086 | ||||||||
Latin America | Operating Segments | |||||||||||
Revenues | |||||||||||
Operating revenue | $ 2,812 | $ 2,759 | $ 2,384 |
Segments & Geographic Information - Narrative (Details) $ in Millions |
3 Months Ended | 12 Months Ended | ||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|
Dec. 31, 2015
USD ($)
|
Sep. 30, 2015
USD ($)
|
Jun. 30, 2015
USD ($)
|
Mar. 31, 2015
USD ($)
|
Dec. 31, 2014
USD ($)
|
Sep. 30, 2014
USD ($)
|
Jun. 30, 2014
USD ($)
|
Mar. 31, 2014
USD ($)
|
Dec. 31, 2015
USD ($)
Segments
|
Dec. 31, 2014
USD ($)
|
Dec. 31, 2013
USD ($)
|
Jun. 30, 2012
USD ($)
|
|
Business Acquisition [Line Items] | ||||||||||||
Number of operating segments | Segments | 2 | |||||||||||
Refinery, purchase price | $ 180 | |||||||||||
Grants receivable | $ 30 | |||||||||||
Operating revenue | $ 9,502 | $ 11,107 | $ 10,707 | $ 9,388 | $ 9,647 | $ 11,178 | $ 10,621 | $ 8,916 | $ 40,704 | $ 40,362 | $ 37,773 | |
Intersegment Sales/Other | Exchanged products | ||||||||||||
Business Acquisition [Line Items] | ||||||||||||
Operating revenue | $ 3,108 | $ 5,104 | $ 5,352 |
Restructuring and Other Items - Schedule of Amounts Recorded on Consolidated Statements of Operations (Details) - USD ($) $ in Millions |
12 Months Ended | ||
---|---|---|---|
Dec. 31, 2015 |
Dec. 31, 2014 |
Dec. 31, 2013 |
|
Restructuring Cost and Reserve [Line Items] | |||
Restructuring and other items | $ 35 | $ 716 | $ 402 |
Fleet and other | |||
Restructuring Cost and Reserve [Line Items] | |||
Restructuring and other items | 35 | 758 | 402 |
Severance and related costs | |||
Restructuring Cost and Reserve [Line Items] | |||
Restructuring and other items | 0 | 71 | 0 |
Settlements | |||
Restructuring Cost and Reserve [Line Items] | |||
Restructuring and other items | $ 0 | $ 113 | $ 0 |
Restructuring and Other Items - Schedule of Restructuring Charges (Details) - USD ($) $ in Millions |
12 Months Ended | ||
---|---|---|---|
Dec. 31, 2015 |
Dec. 31, 2014 |
Dec. 31, 2013 |
|
Severance and related costs | |||
Restructuring Reserve | |||
Liability at beginning of period | $ 42 | $ 0 | $ 49 |
Additional costs and expenses | 51 | 71 | 0 |
Payments | (41) | (29) | (46) |
Other | 0 | 0 | (3) |
Liability at end of period | 52 | 42 | 0 |
Lease restructuring | |||
Restructuring Reserve | |||
Liability at beginning of period | 462 | 168 | 77 |
Additional costs and expenses | 41 | 349 | 114 |
Payments | (86) | (55) | (18) |
Other | (2) | 0 | (5) |
Liability at end of period | $ 415 | $ 462 | $ 168 |
Restructuring and Other Items - Narrative (Details) $ in Millions |
12 Months Ended | ||
---|---|---|---|
Dec. 31, 2015
USD ($)
|
Dec. 31, 2014
USD ($)
aircraft
|
Dec. 31, 2013
USD ($)
|
|
Restructuring Cost and Reserve [Line Items] | |||
Restructuring and other | $ 35 | $ 716 | $ 402 |
Fleet and other | |||
Restructuring Cost and Reserve [Line Items] | |||
Restructuring and other | 35 | 758 | 402 |
Severance and related costs | |||
Restructuring Cost and Reserve [Line Items] | |||
Restructuring and other | 0 | 71 | 0 |
Additional costs and expenses | $ 51 | 71 | $ 0 |
Favorable settlement of outstanding litigation | |||
Restructuring Cost and Reserve [Line Items] | |||
Restructuring and other | 67 | ||
Insurance settlement | |||
Restructuring Cost and Reserve [Line Items] | |||
Restructuring and other | $ 46 | ||
B-747-400 | |||
Restructuring Cost and Reserve [Line Items] | |||
Number of aircraft designated for retirement | aircraft | 16 | ||
Fleet retirement, time horizon | 3 years | ||
Number of aircraft retired | aircraft | 3 |
Earnings Per Share (Details) - USD ($) $ / shares in Units, shares in Millions, $ in Millions |
3 Months Ended | 12 Months Ended | |||||||||
---|---|---|---|---|---|---|---|---|---|---|---|
Dec. 31, 2015 |
Sep. 30, 2015 |
Jun. 30, 2015 |
Mar. 31, 2015 |
Dec. 31, 2014 |
Sep. 30, 2014 |
Jun. 30, 2014 |
Mar. 31, 2014 |
Dec. 31, 2015 |
Dec. 31, 2014 |
Dec. 31, 2013 |
|
Earnings Per Share [Abstract] | |||||||||||
Net income | $ 980 | $ 1,315 | $ 1,485 | $ 746 | $ (712) | $ 357 | $ 801 | $ 213 | $ 4,526 | $ 659 | $ 10,540 |
Basic weighted average shares outstanding (shares) | 797 | 836 | 849 | ||||||||
Dilutive effect of share-based awards (shares) | 7 | 9 | 9 | ||||||||
Diluted weighted average shares outstanding (shares) | 804 | 845 | 858 | ||||||||
Basic earnings per share (usd per share) | $ 1.26 | $ 1.67 | $ 1.85 | $ 0.91 | $ (0.86) | $ 0.43 | $ 0.95 | $ 0.25 | $ 5.68 | $ 0.79 | $ 12.41 |
Diluted earnings per share (usd per share) | $ 1.25 | $ 1.65 | $ 1.83 | $ 0.90 | $ (0.86) | $ 0.42 | $ 0.94 | $ 0.25 | $ 5.63 | $ 0.78 | $ 12.29 |
Quarterly Financial Data (Unaudited) - Quarterly Financial Information (Details) - USD ($) $ / shares in Units, $ in Millions |
3 Months Ended | 12 Months Ended | |||||||||
---|---|---|---|---|---|---|---|---|---|---|---|
Dec. 31, 2015 |
Sep. 30, 2015 |
Jun. 30, 2015 |
Mar. 31, 2015 |
Dec. 31, 2014 |
Sep. 30, 2014 |
Jun. 30, 2014 |
Mar. 31, 2014 |
Dec. 31, 2015 |
Dec. 31, 2014 |
Dec. 31, 2013 |
|
Quarterly Financial Information Disclosure [Abstract] | |||||||||||
Operating revenue | $ 9,502 | $ 11,107 | $ 10,707 | $ 9,388 | $ 9,647 | $ 11,178 | $ 10,621 | $ 8,916 | $ 40,704 | $ 40,362 | $ 37,773 |
Operating income | 1,717 | 2,213 | 2,474 | 1,398 | (828) | 835 | 1,579 | 620 | 7,802 | 2,206 | 3,400 |
Net Income | $ 980 | $ 1,315 | $ 1,485 | $ 746 | $ (712) | $ 357 | $ 801 | $ 213 | $ 4,526 | $ 659 | $ 10,540 |
Basic earnings per share (usd per share) | $ 1.26 | $ 1.67 | $ 1.85 | $ 0.91 | $ (0.86) | $ 0.43 | $ 0.95 | $ 0.25 | $ 5.68 | $ 0.79 | $ 12.41 |
Diluted earnings per share (usd per share) | $ 1.25 | $ 1.65 | $ 1.83 | $ 0.90 | $ (0.86) | $ 0.42 | $ 0.94 | $ 0.25 | $ 5.63 | $ 0.78 | $ 12.29 |
Quarterly Financial Data (Unaudited) - Special Items (Details) - USD ($) $ in Millions |
3 Months Ended | |||||||
---|---|---|---|---|---|---|---|---|
Dec. 31, 2015 |
Sep. 30, 2015 |
Jun. 30, 2015 |
Mar. 31, 2015 |
Dec. 31, 2014 |
Sep. 30, 2014 |
Jun. 30, 2014 |
Mar. 31, 2014 |
|
Quarterly Financial Information [Line Items] | ||||||||
Quarterly financial information, quarterly charges and credits, amount affecting comparability | $ 86 | $ (112) | $ 726 | $ 592 | $ (2,157) | $ (1,058) | $ (140) | $ (109) |
MTM adjustments | ||||||||
Quarterly Financial Information [Line Items] | ||||||||
Quarterly financial information, quarterly charges and credits, amount affecting comparability | 91 | (99) | 720 | 589 | (1,966) | (347) | 1 | (34) |
Restructuring and other | ||||||||
Quarterly Financial Information [Line Items] | ||||||||
Quarterly financial information, quarterly charges and credits, amount affecting comparability | 0 | 0 | (25) | (10) | (67) | (570) | (30) | (49) |
Loss on extingushment of debt | ||||||||
Quarterly Financial Information [Line Items] | ||||||||
Quarterly financial information, quarterly charges and credits, amount affecting comparability | (5) | (134) | (111) | (18) | ||||
Virgin Atlantic MTM adjustment | ||||||||
Quarterly Financial Information [Line Items] | ||||||||
Quarterly financial information, quarterly charges and credits, amount affecting comparability | $ (5) | $ (13) | $ 31 | $ 13 | $ (119) | $ (7) | $ 0 | $ (8) |