Delta Airlines 2015 Annual Report Download - page 34

TableofContents
Operating Expense

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.
SalariesandRelatedCosts.Theincreaseinsalariesandrelatedcostsisprimarilyduetohigherpilotandflightattendantblockhoursandpayrateincreases
implementedinboththefirsthalfof2015andDecember2015.Basepayratesincreased14.5%foreligiblemerit,groundandflightattendantemployeeseffective
December1,2015.
AircraftFuelandRelatedTaxes.Includingourregionalcarriers,fuelexpensedecreased$5.9billioncomparedtotheprioryearduetoa43.5%decreaseinthe
marketpricepergallonoffuel,anincreaseinMonroe'sprofitabilityandreducedhedgelosses,partiallyoffsetbya2.4%increaseinconsumption.Thetablebelow
presentsfuelexpense,includingourregionalcarriers:

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.
Thetablebelowshowstheimpactofhedgingandtherefineryonfuelexpenseandaveragepricepergallon,adjusted(non-GAAPfinancialmeasures):



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.
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