Analysis of Reportable Segments
Delta Air Lines Inc. operates in 2 segments: Airline and Refinery.
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- Statement of Comprehensive Income
- Balance Sheet: Assets
- Common-Size Balance Sheet: Liabilities and Stockholders’ Equity
- Analysis of Profitability Ratios
- DuPont Analysis: Disaggregation of ROE, ROA, and Net Profit Margin
- Enterprise Value (EV)
- Dividend Discount Model (DDM)
- Price to Operating Profit (P/OP) since 2007
- Price to Book Value (P/BV) since 2007
- Price to Sales (P/S) since 2007
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Segment Profit Margin
Delta Air Lines Inc., profit margin by reportable segment
| Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | Dec 31, 2018 | Dec 31, 2017 | |
|---|---|---|---|---|---|
| Airline | |||||
| Refinery |
Based on: 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31), 10-K (reporting date: 2019-12-31), 10-K (reporting date: 2018-12-31), 10-K (reporting date: 2017-12-31).
- Airline Segment Profit Margin
- The profit margin for the airline segment showed a fluctuating pattern over the five-year period. Starting at a relatively strong level of 14.74% in 2017, it decreased to 11.86% in 2018, followed by a rebound to 13.95% in 2019. However, in 2020, the profit margin experienced a sharp and significant decline to a negative 76.85%, indicating substantial losses during this period. The following year showed signs of partial recovery with the margin improving to 7.08% in 2021, although it remained below pre-2020 levels.
- Refinery Segment Profit Margin
- The refinery segment consistently demonstrated much lower profit margins compared to the airline segment during the same period. The margin started at 2.18% in 2017 and declined to 1.06% in 2018, then slightly increased to 1.37% in 2019. Similar to the airline segment, the refinery segment faced losses in 2020, reflected by a negative margin of -6.87%. The marginal improvement in 2021 still ended close to break-even at -0.03%, indicating continued financial challenges within this segment.
- Overall Trends and Insights
- Both segments showed resilience in profit margins prior to 2020, with the airline segment performing notably better. The year 2020 marked a critical downturn, likely due to extraordinary external factors impacting operations, leading to deep losses. Although recovery efforts appear evident in 2021, margins for both segments remained below earlier years, suggesting that full restoration of profitability had not yet been achieved within the observed timeframe.
Segment Profit Margin: Airline
Delta Air Lines Inc.; Airline; segment profit margin calculation
| Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | Dec 31, 2018 | Dec 31, 2017 | |
|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | |||||
| Operating income (loss) | |||||
| Operating revenue | |||||
| Segment Profitability Ratio | |||||
| Segment profit margin1 | |||||
Based on: 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31), 10-K (reporting date: 2019-12-31), 10-K (reporting date: 2018-12-31), 10-K (reporting date: 2017-12-31).
1 2021 Calculation
Segment profit margin = 100 × Operating income (loss) ÷ Operating revenue
= 100 × ÷ =
The financial performance of the airline segment exhibits notable fluctuations over the analyzed periods. Operating income experienced a general upward trend from 2017 through 2019, increasing from $6004 million to $6542 million, followed by a significant downturn in 2020 with a loss of $12,253 million. A partial recovery is observed in 2021 with positive operating income of $1888 million, although it remains well below pre-2020 levels.
Operating revenue shows an increasing trend from 2017 to 2019, growing from $40,742 million to $46,910 million. However, a steep decline occurs in 2020, dropping to $15,945 million, which corresponds with the period of substantial operating loss. In 2021, operating revenue improves to $26,670 million but does not reach figures seen before 2020.
The segment profit margin follows a similar pattern. It decreased from 14.74% in 2017 to 11.86% in 2018, then climbed to 13.95% in 2019. A drastic fall is evident in 2020, with a negative margin of -76.85%, reflecting the severe loss situation. The margin rebounds to 7.08% in 2021, signaling an improvement in profitability, although it remains below the levels of prior years.
- Operating Income (Loss)
- Increased steadily between 2017 and 2019, followed by a sharp loss in 2020, and then a partial recovery in 2021.
- Operating Revenue
- Growth observed till 2019, steep decline in 2020 correlating with loss period, partial recovery in 2021 but still under pre-pandemic levels.
- Segment Profit Margin
- Moderate fluctuation with a downward shift in 2018, recovery in 2019, collapse in 2020 with large negative margin, and a noticeable recovery in 2021.
Overall, the data reflect the significant impact of external factors during 2020, leading to a drastic reduction in revenue and profitability. The subsequent recovery in 2021 indicates efforts toward financial stabilization, though performance has not fully rebounded to the previous high levels.
Segment Profit Margin: Refinery
Delta Air Lines Inc.; Refinery; segment profit margin calculation
| Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | Dec 31, 2018 | Dec 31, 2017 | |
|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | |||||
| Operating income (loss) | |||||
| Operating revenue | |||||
| Segment Profitability Ratio | |||||
| Segment profit margin1 | |||||
Based on: 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31), 10-K (reporting date: 2019-12-31), 10-K (reporting date: 2018-12-31), 10-K (reporting date: 2017-12-31).
1 2021 Calculation
Segment profit margin = 100 × Operating income (loss) ÷ Operating revenue
= 100 × ÷ =
- Operating Income (Loss)
- The operating income for the segment demonstrated a fluctuating trend over the five-year period. It initially declined significantly from 110 million US dollars in 2017 to 58 million in 2018. This was followed by a modest recovery to 76 million in 2019. However, there was a sharp deterioration in 2020, with the segment reporting a substantial operating loss of 216 million dollars. In 2021, the loss was substantially reduced to 2 million dollars, indicating a near breakeven performance but still reflecting ongoing challenges.
- Operating Revenue
- Operating revenue showed a generally positive trend with some volatility. Revenue increased from 5,039 million dollars in 2017 to 5,458 million in 2018 and further to 5,558 million in 2019, reflecting growth over the initial three years. In 2020, revenue dropped sharply to 3,143 million dollars, representing a decline likely due to external disruptive factors during that year. By 2021, revenue rebounded substantially to 6,054 million dollars, surpassing previous levels and indicating a strong recovery.
- Segment Profit Margin
- The segment profit margin generally mirrored the trends observed in operating income, beginning at 2.18% in 2017 before declining to 1.06% in 2018. A slight improvement occurred in 2019, with the margin rising to 1.37%. The margin dropped significantly in 2020 to -6.87%, reflecting the operating loss period. In 2021, the margin improved dramatically to nearly break even at -0.03%, suggesting improved cost management or revenue structure although profitability had not fully returned.
Segment Return on Assets (Segment ROA)
Delta Air Lines Inc., ROA by reportable segment
| Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | Dec 31, 2018 | Dec 31, 2017 | |
|---|---|---|---|---|---|
| Airline | |||||
| Refinery |
Based on: 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31), 10-K (reporting date: 2019-12-31), 10-K (reporting date: 2018-12-31), 10-K (reporting date: 2017-12-31).
The return on assets (ROA) data for the airline and refinery segments reveals distinct trends over the five-year period from 2017 to 2021.
- Airline Segment ROA
-
The airline segment exhibited a generally positive ROA from 2017 through 2019, with values of 11.73% in 2017, declining to 8.89% in 2018, and rising slightly to 10.42% in 2019. This suggests relatively stable profitability and asset utilization during these years, though with some fluctuation.
A significant downturn occurred in 2020, where the ROA dropped drastically to -17.37%, indicating substantial losses and underutilization of assets, likely reflecting extraordinary external challenges. There was a partial recovery in 2021, with the ROA improving to 2.68%, though still remaining well below pre-2020 levels, signaling ongoing operational challenges or recovery processes.
- Refinery Segment ROA
-
The refinery segment demonstrated a lower yet positive ROA through 2017 to 2019, starting at 5.17% in 2017, declining to 3.40% in 2018, and rebounding modestly to 4.37% in 2019. This indicates a similar pattern of modest profitability with some volatility.
In 2020, the segment's ROA sharply turned negative to -14.92%, paralleling the airline segment's decline but reflecting slightly less negative magnitude in relative terms. By 2021, it showed a further slight decline to -0.10%, suggesting a limited but insufficient recovery, maintaining near breakeven performance.
Overall, both segments experienced relatively stable and positive ROA figures prior to 2020, followed by severe declines in 2020 reflecting a critical inflection point. The airline segment showed a more pronounced negative impact but a clearer sign of recovery in 2021, whereas the refinery segment remained close to break-even without significant improvement. These patterns highlight a period of considerable operational and financial stress beginning in 2020, followed by tentative steps toward stabilization in 2021.
Segment ROA: Airline
Delta Air Lines Inc.; Airline; segment ROA calculation
| Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | Dec 31, 2018 | Dec 31, 2017 | |
|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | |||||
| Operating income (loss) | |||||
| Total assets, end of period | |||||
| Segment Profitability Ratio | |||||
| Segment ROA1 | |||||
Based on: 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31), 10-K (reporting date: 2019-12-31), 10-K (reporting date: 2018-12-31), 10-K (reporting date: 2017-12-31).
1 2021 Calculation
Segment ROA = 100 × Operating income (loss) ÷ Total assets, end of period
= 100 × ÷ =
The data reveals several notable trends in the airline segment's financial performance and asset base over the five-year period ending in 2021.
- Operating Income (Loss)
- Operating income exhibited a generally positive trajectory from 2017 through 2019, increasing from $6,004 million to $6,542 million. However, a significant downturn occurred in 2020, with operating income plummeting to a loss of $12,253 million. This sharp decline was followed by a partial recovery in 2021, with operating income rising again to $1,888 million, though still well below pre-pandemic levels.
- Total Assets
- Total assets consistently increased each year from 2017 to 2020, rising from $51,165 million to $70,548 million. In 2021, total assets remained relatively stable at $70,360 million, indicating a plateau after several years of growth in the asset base.
- Segment Return on Assets (ROA)
- The segment ROA mirrored the operating income trend, starting at 11.73% in 2017 and declining to 8.89% in 2018, before recovering to 10.42% in 2019. In 2020, the ROA fell sharply to -17.37%, reflecting the operating loss and the impact on asset profitability. In 2021, the ROA improved to 2.68%, indicating some recovery but still significantly below historical performance.
Overall, the segment experienced strong profitability and asset growth through 2019, followed by a pronounced financial setback in 2020. The partial rebound in 2021 suggests resilience but also highlights continued challenges in achieving pre-2020 profitability levels. Asset growth did not reverse, implying sustained investment or capital retention despite the operating loss.
Segment ROA: Refinery
Delta Air Lines Inc.; Refinery; segment ROA calculation
| Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | Dec 31, 2018 | Dec 31, 2017 | |
|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | |||||
| Operating income (loss) | |||||
| Total assets, end of period | |||||
| Segment Profitability Ratio | |||||
| Segment ROA1 | |||||
Based on: 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31), 10-K (reporting date: 2019-12-31), 10-K (reporting date: 2018-12-31), 10-K (reporting date: 2017-12-31).
1 2021 Calculation
Segment ROA = 100 × Operating income (loss) ÷ Total assets, end of period
= 100 × ÷ =
The financial performance and asset base of the refinery segment exhibit notable fluctuations over the five-year period. Operating income initially showed a declining trend from $110 million in 2017 to $58 million in 2018, followed by a partial recovery to $76 million in 2019. However, in 2020, the segment experienced a significant downturn, reporting an operating loss of $216 million. This loss was slightly mitigated in 2021, with the operating loss narrowing substantially to $2 million.
Total assets for the segment decreased from $2,127 million at the end of 2017 to $1,705 million in 2018, then stabilized somewhat around $1,739 million in 2019. The asset base further contracted to $1,448 million in 2020, reflecting possible asset disposals or devaluation amid challenging conditions, before rebounding to $2,099 million in 2021, indicating asset growth or revaluation later in the period.
The segment return on assets (ROA) closely mirrored the operating income trends, starting at a healthy 5.17% in 2017 and declining to 3.4% in 2018. It increased to 4.37% in 2019 but then plunged to -14.92% in 2020, signaling significant losses relative to asset base efficiency during that year. The ROA improved markedly in 2021 to nearly neutral at -0.1%, suggesting recovery but still reflecting a slight loss in profitability on assets employed.
Overall, the data indicate that the refinery segment faced considerable operational and financial challenges, particularly in 2020, likely driven by external factors impacting profitability and asset utilization. The subsequent partial recovery in 2021 highlights a potential stabilization phase, though profitability remained substantially below prior levels.
Segment Asset Turnover
Delta Air Lines Inc., asset turnover by reportable segment
| Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | Dec 31, 2018 | Dec 31, 2017 | |
|---|---|---|---|---|---|
| Airline | |||||
| Refinery |
Based on: 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31), 10-K (reporting date: 2019-12-31), 10-K (reporting date: 2018-12-31), 10-K (reporting date: 2017-12-31).
The annual reportable segment asset turnover data reveals distinct trends across the airline and refinery segments during the five-year period ending December 31, 2021.
- Airline Segment
-
The airline segment exhibited a relatively stable asset turnover ratio in the initial three years, maintained at 0.8 in 2017 and settling at 0.75 in both 2018 and 2019. However, in 2020, a significant decline to 0.23 was observed, indicating a sharp reduction in the efficiency with which the airline segment utilized its assets to generate revenue. This decline aligns temporally with external factors potentially impacting the aviation industry. In the following year, 2021, there was a partial recovery to 0.38, though this level remained substantially below the pre-2020 values, suggesting ongoing challenges in achieving previous operational efficiencies.
- Refinery Segment
-
Conversely, the refinery segment displayed a higher asset turnover ratio throughout the period, starting at 2.37 in 2017 and increasing notably to 3.2 in both 2018 and 2019. This peak indicates a heightened productivity in asset usage during these years. In 2020, the ratio decreased to 2.17, signaling a reduction in operational efficiency, though not as pronounced as in the airline segment. By 2021, the asset turnover improved again to 2.88, nearing the prior peak levels of 2018 and 2019. This pattern suggests the refinery segment was more resilient and capable of rebounding after the downturn experienced in 2020.
Overall, the data reflects the significant impact on asset turnover ratios of the airline segment starting in 2020, followed by a modest recovery, whereas the refinery segment maintained higher and more stable turnover levels, with a dip and subsequent rebound within the same time frame. This disparity might be indicative of differing operational dynamics and external influences affecting each segment uniquely.
Segment Asset Turnover: Airline
Delta Air Lines Inc.; Airline; segment asset turnover calculation
| Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | Dec 31, 2018 | Dec 31, 2017 | |
|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | |||||
| Operating revenue | |||||
| Total assets, end of period | |||||
| Segment Activity Ratio | |||||
| Segment asset turnover1 | |||||
Based on: 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31), 10-K (reporting date: 2019-12-31), 10-K (reporting date: 2018-12-31), 10-K (reporting date: 2017-12-31).
1 2021 Calculation
Segment asset turnover = Operating revenue ÷ Total assets, end of period
= ÷ =
The data reflects the financial performance and asset efficiency of the airline segment over a five-year period ending in 2021. Several trends and patterns emerge from the information provided.
- Operating Revenue
- The operating revenue shows a steady increase from 2017 to 2019, rising from approximately $40.7 billion to $46.9 billion. However, there is a significant decline in 2020 to about $15.9 billion, likely reflecting an extraordinary event impacting the industry, followed by a partial recovery in 2021 to $26.7 billion. Despite this recovery, 2021 revenues remain substantially below pre-2020 levels.
- Total Assets, End of Period
- Total assets increase consistently from 2017 through 2020, growing from around $51.2 billion to approximately $70.5 billion. This represents sustained asset growth even during the year of reduced operating revenue in 2020. The total assets level stabilizes in 2021, showing a negligible decline to roughly $70.4 billion.
- Segment Asset Turnover
- This ratio, which measures how efficiently assets generate revenue, declines steadily from 0.8 in 2017 to 0.75 in both 2018 and 2019. In 2020, it falls sharply to 0.23, corresponding with the significant drop in operating revenue. By 2021, there is an improvement to 0.38, yet asset turnover remains markedly below the earlier years' levels, indicating reduced efficiency in generating revenue from assets during this period.
Overall, the segment exhibited growth in revenue and assets through 2019, followed by a substantial disruption in 2020, sharply impacting revenue and asset utilization. Although some recovery is evident in 2021, operational efficiency has not returned to prior levels, suggesting ongoing challenges in leveraging asset base for revenue generation in the immediate post-disruption environment.
Segment Asset Turnover: Refinery
Delta Air Lines Inc.; Refinery; segment asset turnover calculation
| Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | Dec 31, 2018 | Dec 31, 2017 | |
|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | |||||
| Operating revenue | |||||
| Total assets, end of period | |||||
| Segment Activity Ratio | |||||
| Segment asset turnover1 | |||||
Based on: 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31), 10-K (reporting date: 2019-12-31), 10-K (reporting date: 2018-12-31), 10-K (reporting date: 2017-12-31).
1 2021 Calculation
Segment asset turnover = Operating revenue ÷ Total assets, end of period
= ÷ =
The analysis of the financial data over the reported periods reveals several notable trends in the segment's performance. Operating revenue experienced fluctuations, with an overall increase observed from the beginning to the end of the timeline. After a rise from 2017 through 2019, there was a significant decrease in 2020, followed by a recovery in 2021 that surpassed previous years' revenue levels.
Total assets at the end of each period showed a downward trend initially, decreasing from 2017 to 2020. However, the asset base increased again in 2021, nearing the levels observed at the start of the period under review. This pattern suggests adjustments in asset management or possible investments made in the final year.
Segment asset turnover, which measures the efficiency of asset use to generate revenue, displayed variability throughout the years. It peaked in 2018 and 2019, indicating heightened efficiency during those periods. A decline followed in 2020, corresponding with the drop in operating revenue and total assets, before improving again in 2021 but not fully reaching previous peak levels.
- Operating Revenue
- Increased from 5039 million USD in 2017 to 6054 million USD in 2021, with a noticeable dip in 2020.
- Total Assets, End of Period
- Decreased from 2127 million USD in 2017 to 1448 million USD in 2020, then rose to 2099 million USD in 2021.
- Segment Asset Turnover
- Improved from 2.37 in 2017 to 3.2 in 2018 and 2019, declined to 2.17 in 2020, and increased to 2.88 in 2021.
Overall, the data indicate that the segment underwent a period of contraction and reduced efficiency in 2020, potentially due to external factors affecting operations. The subsequent rebound in revenue, assets, and turnover in 2021 suggests a recovery phase with improved utilization of assets relative to revenue generation, although not fully restoring the highest efficiency levels seen in earlier years.
Segment Capital Expenditures to Depreciation
Delta Air Lines Inc., capital expenditures to depreciation by reportable segment
| Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | Dec 31, 2018 | Dec 31, 2017 | |
|---|---|---|---|---|---|
| Airline | |||||
| Refinery |
Based on: 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31), 10-K (reporting date: 2019-12-31), 10-K (reporting date: 2018-12-31), 10-K (reporting date: 2017-12-31).
The analysis of the annual reportable segment capital expenditures to depreciation ratios over the five-year period reveals distinct trends between the airline and refinery segments.
- Airline Segment
- The ratio initially increased from 1.71 in 2017 to a peak of 2.21 in 2018, indicating higher capital expenditure relative to depreciation during this period. Subsequently, it decreased moderately to 1.89 in 2019, suggesting a reduction in capital investment relative to the depreciation expense. A significant decline to 0.81 occurred in 2020, reflecting a substantial drop in capital expenditures compared to depreciation, likely influenced by challenging operational conditions during that year. In 2021, the ratio partially recovered to 1.6, showing renewed investment activity, although it did not reach pre-2020 levels.
- Refinery Segment
- The refinery segment ratio displayed a decreasing trend from 3.15 in 2017 to 2.43 in 2018. This was followed by a sharp decline to 0.57 in 2019, and an even lower ratio of 0.2 in 2020, indicating a pronounced reduction in capital expenditures relative to depreciation. The ratio rose somewhat in 2021 to 0.62, reflecting a slight recovery but still remaining markedly lower than the earlier years. This pattern suggests significant scaling back of investment in the refinement segment over the period, with minimal capital expenditure relative to asset depreciation during and after 2019.
Overall, both segments show a marked decrease in the capital expenditures to depreciation ratios starting in 2019 and reaching low points in 2020, likely driven by broader economic or industry-specific disruptions. The recovery in 2021 is more pronounced in the airline segment compared to the refinery segment, indicating differing investment dynamics or strategic priorities.
Segment Capital Expenditures to Depreciation: Airline
Delta Air Lines Inc.; Airline; segment capital expenditures to depreciation calculation
| Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | Dec 31, 2018 | Dec 31, 2017 | |
|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | |||||
| Capital expenditures | |||||
| Depreciation and amortization | |||||
| Segment Financial Ratio | |||||
| Segment capital expenditures to depreciation1 | |||||
Based on: 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31), 10-K (reporting date: 2019-12-31), 10-K (reporting date: 2018-12-31), 10-K (reporting date: 2017-12-31).
1 2021 Calculation
Segment capital expenditures to depreciation = Capital expenditures ÷ Depreciation and amortization
= ÷ =
The analysis of the annual airline segment data reveals several key trends over the five-year period from the end of 2017 through the end of 2021.
- Capital Expenditures
- Capital expenditures exhibited a generally upward trend from 2017 to 2019, increasing from approximately 3,743 million US dollars in 2017 to 5,005 million US dollars in 2018, followed by a slight decline to 4,880 million US dollars in 2019. In 2020, capital expenditures sharply declined to 1,879 million US dollars, reflecting significant reduction amidst external pressures likely impacting investment decisions. In 2021, capital expenditures rebounded to 3,188 million US dollars, indicating a partial recovery in investment activity.
- Depreciation and Amortization
- Depreciation and amortization expenses increased steadily from 2188 million US dollars in 2017 to a peak of 2,581 million US dollars in 2019. In 2020, a decrease to 2,312 million US dollars was recorded, followed by a further decrease to 1,998 million US dollars in 2021. This decline in 2020 and 2021 possibly reflects changes in asset base or accounting adjustments related to the challenging operational environment.
- Segment Capital Expenditures to Depreciation Ratio
- The ratio of capital expenditures to depreciation followed a similar pattern to capital expenditures, starting at 1.71 in 2017, rising to a peak of 2.21 in 2018 and then tapering down to 1.89 in 2019. A marked drop to 0.81 in 2020 suggests capital spending was significantly lower relative to depreciation, indicative of constrained investment capacity. The ratio partially recovered to 1.6 in 2021, reflecting renewed, albeit cautious, capital expenditure relative to asset depreciation.
Overall, the data indicates an expansion phase up to 2019, followed by a substantial contraction in capital spending in 2020, likely due to external adverse conditions. Depreciation trends indicate a shrinking asset base or adjusted asset valuation in 2020 and 2021. The ratio of capital expenditures to depreciation corroborates these patterns, highlighting a period of reduced reinvestment transitioning towards gradual recovery.
Segment Capital Expenditures to Depreciation: Refinery
Delta Air Lines Inc.; Refinery; segment capital expenditures to depreciation calculation
| Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | Dec 31, 2018 | Dec 31, 2017 | |
|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | |||||
| Capital expenditures | |||||
| Depreciation and amortization | |||||
| Segment Financial Ratio | |||||
| Segment capital expenditures to depreciation1 | |||||
Based on: 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31), 10-K (reporting date: 2019-12-31), 10-K (reporting date: 2018-12-31), 10-K (reporting date: 2017-12-31).
1 2021 Calculation
Segment capital expenditures to depreciation = Capital expenditures ÷ Depreciation and amortization
= ÷ =
- Capital expenditures
- Capital expenditures exhibit a declining trend from 2017 through 2020, decreasing sharply from 148 million US dollars in 2017 to only 20 million US dollars by 2020. There is a noticeable rebound in 2021, rising to 59 million US dollars. This suggests a period of reduced investment, likely reflecting strategic shifts or external factors impacting the segment, followed by renewed capital allocation in the most recent year.
- Depreciation and amortization
- Depreciation and amortization expenses steadily increased over the observed period, starting at 47 million US dollars in 2017 and nearly doubling to 95 million US dollars by 2021. The peak values remain relatively stable in 2019 and 2020 at approximately 99 million US dollars, indicating a consistent level of asset base subject to amortization despite fluctuations in capital expenditures.
- Segment capital expenditures to depreciation ratio
- The ratio of capital expenditures to depreciation shows a significant downward trend from a high of 3.15 in 2017 to a low of 0.2 in 2020. This indicates that capital spending was substantially lower relative to the expense recognized from existing assets in 2020. The partial recovery of this ratio to 0.62 in 2021 suggests an increase in investment relative to the asset depreciation, although it remains below the initial levels, pointing towards cautious or selective capital deployment in recent times.
Operating revenue
Delta Air Lines Inc., operating revenue by reportable segment
US$ in millions
| Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | Dec 31, 2018 | Dec 31, 2017 | |
|---|---|---|---|---|---|
| Airline | |||||
| Refinery | |||||
| Intersegment sales | |||||
| Consolidated |
Based on: 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31), 10-K (reporting date: 2019-12-31), 10-K (reporting date: 2018-12-31), 10-K (reporting date: 2017-12-31).
- Operating Revenue Trends
- The operating revenue from the Airline segment exhibited a steady increase from 2017 to 2019, rising from $40,742 million to $46,910 million. However, in 2020, a significant decline occurred, with revenue dropping sharply to $15,945 million, reflecting a substantial impact likely related to external adverse conditions during that year. In 2021, a partial recovery is observed as the revenue increased to $26,670 million, though it remained below pre-2020 levels.
- The Refinery segment's operating revenue showed a moderate upward trend from 2017 through 2019, starting at $5,039 million and reaching $5,558 million. This was followed by a downturn in 2020 to $3,143 million, analogous to the decline seen in the Airline segment, suggesting broader systemic challenges. Revenue rebounded in 2021 to $6,054 million, surpassing the 2019 peak and indicating strong recovery in this segment.
- Intersegment Sales
- Intersegment sales are recorded as negative values, reflecting internal transactions that reduce consolidated revenue figures. These sales increased in magnitude consistently from -$4,537 million in 2017 to -$5,461 million in 2019. There was a marked reduction in 2020 to -$1,993 million, in line with declines observed in other segments. In 2021, the figure rose to -$2,825 million, indicating some restoration of intersegment activity compared to 2020 but not reaching prior levels.
- Consolidated Revenue
- The consolidated operating revenue followed a pattern similar to the Airline and Refinery segments. It increased steadily from $41,244 million in 2017 to $47,007 million in 2019 before experiencing a sharp decline to $17,095 million in 2020. This decline coincides with the reduced segment revenues and lower intersegment sales during that period. In 2021, consolidated revenue increased to $29,899 million, demonstrating recovery yet remaining below the pre-2020 peak.
- Summary of Observations
- Overall, the data reveals robust growth in operating revenues from 2017 to 2019 across all segments, followed by a pronounced decline in 2020. This downturn was partially reversed in 2021, with both the Airline and Refinery segments showing revenue improvements, though not fully regaining their previous highs. Intersegment sales followed a comparable trend, affecting consolidated revenue calculations. The patterns indicate a significant disruption in 2020 with a recovery trajectory in the subsequent year.
Operating income (loss)
Delta Air Lines Inc., operating income (loss) by reportable segment
US$ in millions
| Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | Dec 31, 2018 | Dec 31, 2017 | |
|---|---|---|---|---|---|
| Airline | |||||
| Refinery | |||||
| Consolidated |
Based on: 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31), 10-K (reporting date: 2019-12-31), 10-K (reporting date: 2018-12-31), 10-K (reporting date: 2017-12-31).
The data reveals significant fluctuations in the operating income (loss) for the reported segments over the five-year period.
- Airline Segment
- The Airline segment showed an operating income of $6,004 million in 2017, followed by a decline to $5,206 million in 2018. The figure rebounded to $6,542 million in 2019, indicating a positive trajectory prior to 2020. However, 2020 presented a substantial operating loss of $-12,253 million, reflecting a severe downturn. In 2021, the segment returned to profitability with an operating income of $1,888 million, though this remained significantly below the pre-2020 levels.
- Refinery Segment
- The Refinery segment exhibited relatively smaller magnitudes in operating income compared to the Airline segment. It recorded $110 million in 2017, which declined to $58 million in 2018, before a modest increase to $76 million in 2019. Similar to the Airline segment, the Refinery experienced a considerable loss of $-216 million in 2020. In 2021, the operating loss narrowed significantly to $-2 million, approaching break-even.
- Consolidated Results
- The consolidated operating income mirrored the trends observed in the individual segments. From $6,114 million in 2017, the income decreased to $5,264 million in 2018 and improved to $6,618 million in 2019. A pronounced loss of $-12,469 million occurred in 2020, consistent with the challenges faced during that year. Recovery was evident in 2021 with a positive operating income of $1,886 million, albeit still considerably below prior peak levels.
Overall, the data illustrates a pattern of growth and stability through 2019, disrupted by a sharp decline in 2020 across all segments, most likely due to extraordinary circumstances impacting operations. A partial recovery is observed in 2021, though profitability remains below historical highs. The volatility underscores the sensitivity of the business to external shocks and the subsequent efforts toward stabilization.
Depreciation and amortization
Delta Air Lines Inc., depreciation and amortization by reportable segment
US$ in millions
| Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | Dec 31, 2018 | Dec 31, 2017 | |
|---|---|---|---|---|---|
| Airline | |||||
| Refinery | |||||
| Other | |||||
| Consolidated |
Based on: 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31), 10-K (reporting date: 2019-12-31), 10-K (reporting date: 2018-12-31), 10-K (reporting date: 2017-12-31).
- Depreciation and Amortization Trends for the Airline Segment
- The Airline segment's depreciation and amortization expenses showed an increasing trend from 2017 to 2019, rising from 2,188 million US dollars in 2017 to a peak of 2,581 million in 2019. This upward trend was followed by a decline in the subsequent years, dropping to 2,312 million in 2020 and further decreasing to 1,998 million by the end of 2021. This pattern suggests a possible expansion or increased asset base until 2019, with a reduction possibly due to asset disposals, impairments, or changes in depreciation policies in the following years.
- Depreciation and Amortization Trends for the Refinery Segment
- The Refinery segment exhibited an upward trend from 2017 to 2019, with depreciation and amortization expenses increasing from 47 million US dollars in 2017 to 99 million in 2019. The value remained stable at 99 million in 2020 and experienced a slight decline to 95 million in 2021. This indicates that the Refinery segment may have undergone investments or asset additions until 2019, with depreciation expenses stabilizing and only marginally decreasing thereafter.
- Depreciation and Amortization Trends for the Other Segment
- The 'Other' category presents negative values beginning in 2019 (-99 million), persisting in 2020 (-99 million), and slightly less negative in 2021 (-95 million). The absence of data for 2017 and 2018, combined with consistent negative figures from 2019 onwards, could imply accounting adjustments such as reversals, reclassifications, or offsets rather than direct depreciation expenses. This unusual pattern indicates that this segment likely includes non-operational or contra-assets affecting the total figures.
- Overall Consolidated Depreciation and Amortization
- The consolidated depreciation and amortization expenses closely follow the trends seen in the Airline segment, starting at 2,235 million US dollars in 2017, peaking at 2,581 million in 2019, and then decreasing to 2,312 million in 2020 and 1,998 million in 2021. This alignment suggests that the Airline segment constitutes the majority of the consolidated depreciation and amortization figures. The impact of the Refinery and Other segments is relatively minor in comparison, with the negative values in the Other segment reducing the overall consolidated total slightly.
Total assets, end of period
Delta Air Lines Inc., total assets, end of period by reportable segment
US$ in millions
| Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | Dec 31, 2018 | Dec 31, 2017 | |
|---|---|---|---|---|---|
| Airline | |||||
| Refinery | |||||
| Consolidated |
Based on: 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31), 10-K (reporting date: 2019-12-31), 10-K (reporting date: 2018-12-31), 10-K (reporting date: 2017-12-31).
- Segment Total Assets Trend Analysis
-
The Airline segment demonstrates a consistent upward trend in total assets from 2017 through 2020, increasing from approximately 51.2 billion USD at the end of 2017 to about 70.5 billion USD at the end of 2020. However, in 2021, the total assets slightly declined to roughly 70.4 billion USD, indicating a marginal reduction after several years of growth.
-
The Refinery segment exhibits a different pattern, with total assets generally fluctuating over the same period. Starting at 2.1 billion USD in 2017, the assets decreased to 1.7 billion USD by the end of 2018, followed by a modest rise in 2019 to approximately 1.7 billion USD again. Subsequently, a decline is seen in 2020, falling to around 1.4 billion USD, before increasing to 2.1 billion USD in 2021, nearly returning to the 2017 level.
-
The Consolidated metric, representing the combination of the segments, reflects the aggregate movement, revealing a steadily rising trend in total assets from 53.3 billion USD in 2017 to 72.0 billion USD in 2020, with a slight increase to 72.5 billion USD in 2021. This growth primarily mirrors the expansion in the Airline segment’s assets, as it constitutes the majority of the total assets.
-
Overall, the total assets have shown consistent growth during the five-year period, driven mainly by the Airline segment’s asset accumulation, with a brief deceleration in growth in 2021. The Refinery segment’s assets exhibit more variability without a clear trend, suggesting a more volatile or less strategic asset base compared to the Airline segment.
Capital expenditures
Delta Air Lines Inc., capital expenditures by reportable segment
US$ in millions
| Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | Dec 31, 2018 | Dec 31, 2017 | |
|---|---|---|---|---|---|
| Airline | |||||
| Refinery | |||||
| Consolidated |
Based on: 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31), 10-K (reporting date: 2019-12-31), 10-K (reporting date: 2018-12-31), 10-K (reporting date: 2017-12-31).
- Airline Segment Capital Expenditures
- The capital expenditures for the airline segment showed an increasing trend from 2017 to 2018, rising from 3,743 million US dollars to 5,005 million US dollars. However, in 2019, there was a slight decrease to 4,880 million US dollars. The year 2020 experienced a significant decline to 1,879 million US dollars, likely influenced by external factors impacting the industry. In 2021, capital expenditures increased again to 3,188 million US dollars, though the value remained below the levels observed in 2017 through 2019.
- Refinery Segment Capital Expenditures
- Capital expenditures in the refinery segment were relatively lower compared to the airline segment. There was a modest increase from 148 million US dollars in 2017 to 163 million US dollars in 2018, followed by a sharp decline to 56 million US dollars in 2019. This declining trend continued with 20 million US dollars reported in 2020. In 2021, there was a partial recovery with capital expenditures rising to 59 million US dollars, though still substantially below earlier levels.
- Consolidated Capital Expenditures
- The consolidated capital expenditures, aggregating both segments, followed a similar pattern to the airline segment. An increase was observed from 3,891 million US dollars in 2017 to 5,168 million US dollars in 2018, followed by a modest decline to 4,936 million US dollars in 2019. The year 2020 marked a significant reduction to 1,899 million US dollars, with a partial rebound to 3,247 million US dollars in 2021. Overall, the capital expenditure levels in 2021 remained below the peak values noted in 2018 and 2019.
- Summary
- Overall, capital expenditures exhibited a peak around 2018, followed by decreases in subsequent years, with the most notable drop occurring in 2020. This downward shift was evident across both segments and consolidated figures. The partial recovery in 2021 suggests a cautious resumption of investment activities, though expenditure levels have not yet returned to pre-2020 peaks. The more pronounced volatility in the airline segment expenditures reflects the segment's larger contribution to overall capital spending and its sensitivity to industry conditions.