Delta Airlines 2002 Annual Report Download - page 175

As part of this amended agreement, we received a warrant to purchase up to an
additional 720,000 shares of Republic common stock for (1) $12.50 per share, if
the warrant is exercised prior to the completion of Republic's initial public
offering of common stock (IPO) or (2) the price per share at which Republic
common stock is sold in the IPO, if the warrant is exercised after or in
connection with the IPO. The warrant is exercisable in whole or in part at any
time until February 7, 2013. The fair value of this warrant on the date received
was not material.
Note 23. Quarterly Financial Data (Unaudited)
The following table summarizes our unaudited quarterly results of operations
for 2002 and 2001:
Three Months Ended
2002 ---------------------------------------------------------------
(in millions, except per share data) March 31 June 30 September 30 December 31
------------------------------------ -------- ------- ------------ -----------
Operating revenues $ 3,103 $ 3,474 $ 3,420 $ 3,308
Operating loss $ (435) $ (127) $ (385) $ (362)
Net loss $ (397) $ (186) $ (326) $ (363)
Basic and diluted loss per share(1) $ (3.25) $ (1.54) $ (2.67) $ (2.98)
------- ------- ------- ---------
Three Months Ended
2001 ---------------------------------------------------------------
(in millions, except per share data) March 31 June 30 September 30 December 31
------------------------------------ -------- ------- ------------ -----------
Operating revenues $ 3,842 $ 3,776 $ 3,398 $ 2,863
Operating loss $ (115) $ (114) $ (251) $ (1,122)
Net loss $ (133) $ (90) $ (259) $ (734)
Basic and diluted loss per share(1) $ (1.11) $ (0.76) $ (2.13) $ (5.98)
------- ------- ------- ---------
(1) The sum of the quarterly earnings per share does not equal the annual
earnings per share due to changes in average shares outstanding.
Our financial results for the years ended December 31, 2002 and 2001 were
materially impacted by certain events, as discussed below:
- During the six months ended June 30, 2001, public concern over a
possible strike by Delta pilots relating to then ongoing collective
bargaining negotiations caused some customers to make reservations and
travel with airlines other than Delta. On June 20, 2001, Delta pilots
ratified a new collective bargaining agreement, avoiding a possible
strike.
- On March 26, 2001, Comair pilots began a strike, which continued until
June 22, 2001 when they ratified a new collective bargaining agreement.
As a result of this 89-day strike, Comair suspended its operations
between March 26, 2001 and July 1, 2001. Comair resumed partial service
on July 2, 2001, and gradually began restoring service during the
remainder of the year. Service was fully restored to pre-strike levels
during January 2002.
- Prior to September 11, 2001, the slowing U.S. and world economies
reduced the demand for air travel among both business and leisure
passengers. This decline in demand negatively impacted our passenger
traffic and yield in 2001 and 2002.
- The business environment significantly worsened as a result of the
September 11 terrorist attacks. See Note 16 for information regarding
certain charges and costs we recorded in 2001 as a result of these
attacks.
- During 2002, we made significant changes in our fleet plan to simplify
our aircraft fleet to reduce capacity and to decrease capital
expenditures through aircraft deferrals. See Note 16 for information
related to charges and other costs associated with these fleet changes.
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