Critical Analysis of Delta Air Lines, Inc.
Financial Reporting and Disclosure
Table of Contents
Description of Delta Air Lines, Inc.
Background, Industry, Market
Similarities and Differences
Direction of Disclosure
Three Year Comparison
Financial Statement Analysis
Three Year Ratio Analysis
Disclosure of Note Items
Application of GAAP
Description of Delta Air Lines, Inc.
Background and Products
Delta Air Lines, Inc. was originally formed as Huff Daland Dusters, Inc. on May 30, 1924, in Macon, Georgia. This began as an aerial crop dusting operation until the company moved to Ouachita Parish in northeastern Louisiana, in 1925, and began acting as a passenger airline in late 1929. Collett E. Woolman purchased the company on September 13, 1928, and renamed it Delta Air Service, with headquarters in Monroe. In the ensuing decades, Delta grew through the addition of routes and the acquisition of other airlines. It transitioned from propeller planes to jets in the 1970s, and entered international competition to Europe in the 1970s and across the Pacific in the 1980s. Delta Air Lines, Inc. is currently a major airline based in the United States headquartered in Atlanta. Delta is the world's largest airline operating under a single certificate, operating flights on six continents across the globe. Delta operates an extensive domestic and international network, spanning North America, South America, Europe, Asia, Africa, the Middle East, the Caribbean and Australia. Delta and its subsidiary Delta Connection operate over 4,000 flights every day. Delta and the Delta Connection carriers fly to 348 destinations in 64 countries. Industry and Market
Typically, airline companies and aircraft manufacturers are more prone to swings in revenue and equity market prices due to the release of economic indicators. Delta had an increase of 38% in domestic revenue since 2008. This is due to increased cargo and baggage handling fees due to new policy implementation. Delta increased its international revenue by 26% since 2008. This is mostly due to an increased focus in the international arena due to the lower demand and higher competition from discount airliners in the U.S. The airline industry contains a variety of different airlines. Some of Delta’s biggest competitors are AirTran Holdings, Southwest Airlines Company, Continental Airlines, American Airlines, JetBlue Airways, United Airlines, and US Airway Group. All of these competitors are diversified in terms of the number of different things they offer, allowing companies in the industry to have access to a number of different profitable markets. Similarities and Differences in Financial Reporting
Comparison of Annual Report, 10K and 10Q
Delta Air Lines, Inc. uses a number of different elements to supply pertinent information to consumers, investors, creditors, employees, and anyone with a general interest in or curiosity about the company. This pertinent information comes in the form of reports that companies file with the Security and Exchange Commission or SEC, such as the company annual report, the 10K and the 10Q. The annual report is a comprehensive report on a company’s activities throughout the preceding year. Annual reports are intended to give shareholders and other interested persons information about the company’s activities and performance. The 10K is a summary report of a company’s performance that must be submitted annually to the SEC. The 10Q, on the other hand, is a report of a company’s performance submitted quarterly by all public firms to the Securities and Exchange Commission. In the 10Q, firms are required to disclose only newly relevant information regarding their financial position. We see that all three reports are very similar in...
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