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Delta Air Lines, Inc.'s (DAL) CEO Ed Bastian On Q4 2021 Results - Earnings Call Transcript

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SA Transcripts

Delta Air Lines, Inc. (NYSE:DAL) Q4 2021 Earnings Conference Call January 13, 2022 10:00 AM ET

Company Participants

Ed Bastian - Chief Executive Officer

Julie Stewart - Vice President, Investor Relations

Glen Hauenstein - President

Dan Janki - Chief Financial Officer

Tim Mapes - Senior Vice President and Chief Marketing & Communications Officer

Conference Call Participants

Savi Syth - Raymond James

Andrew Didora - Bank of America

David Vernon - Bernstein

Ravi Shanker - Morgan Stanley

Mike Linenberg - Deutsche Bank

Jamie Baker - JPMorgan

Duane Pfennigwerth - Evercore ISI

Sheila Kahyaoglu - Jefferies

Conor Cunningham - MKM Partners

Myles Walton - UBS

Hunter Keay - Wolfe Research

Mary Schlangenstein - Bloomberg News

Alison Sider - Wall Street Journal

Leslie Josephs - CNBC

Edward Russell - Skift

David Slotnick - TPG

Robert Silk - Travel Weekly


Good morning, everyone, and welcome to the Delta Air Lines December Quarter and Full Year 2021 Financial Results Conference Call. My name is Cody, and I will be your coordinator. At this time, all participants are in a listen-only mode until we conduct a question-and-answer session following the presentation. As a reminder, today’s call is being recorded.

I would now like to turn the conference over to Julie Stewart, Vice President of Investor Relations. Please go ahead.

Julie Stewart

Thank you, Cody. Good morning, everyone, and thanks for joining us for our December quarter and full year 2021 earnings call. Joining us today from Atlanta are CEO, Ed Bastian; our President, Glen Hauenstein; our CFO, Dan Janki. Ed will open the call with an overview of Delta’s performance and strategy and Glen will provide an update on revenue and Dan will discuss cost and our balance sheet.

After the prepared remarks, we will take analyst questions and we ask you please limit yourself to

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Comments (4)

metalhead profile picture
Not one single analyst thought to ask a non-softball question? How about this one, to the CFO:

Why did you have to resort to non-GAAP accounting to claim a "profitable" Q4? What were the "special one-time items" that were used to cook the books? Can you give some color on how you got to this point, did you read Jeffery Skillings book on how to commit accounting fraud?
the use of JUSTIFIED non-GAAP accounting is used by airlines, but the key word is “justified”. GAAP rules miss some of the current situations that it is appropriate to use restated statements.

Having said that, not a single “softball question” asked about the shortage of number of planes Delta has vs. 2019. Instead, the smokescreen is Omicron, while Delta is desperately trying to get more planes into its active fleet, planes it does not have today.

All business is about the creative presentation of bad news. In this case, it is about what is being omitted. Don’t say anything because it puts the issue on the radar scope, while some of the other airlines are ahead of their 2019 plane count. And the whole argument that somehow Delta is “upgauging” has been presented without a shred of evidence that it is actually making a material difference since going into Covid, delta already had the most seats per plane and increasing that lead is wxtremely difficult given the number of wide bodies delta retired. And oh yeah. Delta has already sold many of those planes, so the logic promulgated on SA that says Delta will somehow “pull those planes out of the desert” is bogus.
metalhead profile picture
@markcc I agree there are sometimes special events that could justify stating non-GAAP earnings, but Delta seems to have gone a bit too far here.

From what I could tell the main component that they used to justify a non-GAAP report was mark-to-market investment losses. I really wish I had the time to drill into the details, but I suspect this was their ill-fated LATAM investment that is probably going to end up being a total loss. Not sure if they did a mark-to-fantasy or what to get to a non-GAAP profit. If the bankruptcy judge cancels the LATAM stock they'll certainly have to restate earnings. Or maybe they own enough of the bonds to get some small recovery, again I don't claim to have enough knowledge here, it just smells funny.

The other thing they did was related to employee profit sharing, but I am not thinking that made much of a difference as it was not a large amount of money relative to their revenue.

On your point about the planes - yes, I agree that somehow this issue got omitted from the discussion, again because analysts are so biased in favor of the sell side. They wouldn't dare ask such a probing question. They'd probably get kicked out of the next earnings call.

It makes these earnings transcripts really useless for investors. If they're going to be love-fests and sucking up to the CEO, they might as well not even bother.
LATAM is in trouble and keeps dropping and market cap is now lower than smaller GOL. Delta has already mostly, if not all, written off that $2+ billion "investment", limiting future losses.

Agreed that earnings transcripts leave a lot out. Why do you think that most airlines started having VIRTUAL shareholder meetings BEFORE COVID? These guys dont want the real questions to come up. And yes, there are a lot of amateur questions at shareholder meetings but things got ridiculous at the United meeting a few years ago when questions for embattled Smisek were limited to 5 minutes, then the execs were promptly shuffled out so they did not have to answer questions.
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