Delta Airlines 2015 Annual Report Download - page 37

TableofContents
Operating Expense

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.
SalariesandRelatedCosts.Theincreaseinsalariesandrelatedcostsisprimarilyduetoinvestmentsinouremployeesandanincreaseinpilotandflight
attendantblockhours,partiallyoffsetbylowerpensionexpense.
FuelExpense.Comparedtotheprioryear,consolidatedfuelexpenseincreased$2.0billionduetounfavorableMTMadjustmentsonfuelhedgesresultingfrom
thesignificantdecreaseincrudeoilpricesduringtheyear(fromahighof$115perbarrelinJunetoalowof$57perbarrelatDecember31,2014)anda1.7%
increaseinconsumption,partiallyoffsetbya7.8%decreaseinfuelmarketpricepergallonandincreasedprofitabilityatMonroe.Thetablebelowpresentsfuel
expense,gallonsconsumedandouraveragepricepergallon,includingtheimpactofhedgingandtherefinery:

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.
Thetablebelowshowstheimpactofhedgingandtherefineryonfuelexpenseandaveragepricepergallon,adjusted:



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.
33