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Delta Air Lines Inc. (DAL)

Long-term Debt and Solvency Analysis

Difficulty: Beginner

  • Annual Data
  • Quarterly Data

    • Solvency ratios also known as long-term debt ratios measure a company's ability to meet long-term obligations.

    Ratios (Summary)

    Delta Air Lines Inc., debt and solvency ratios

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    Dec 31, 2017 Dec 31, 2016 Dec 31, 2015 Dec 31, 2014 Dec 31, 2013
    Debt to equity 0.64 0.60 0.77 1.11 0.97
    Debt to capital 0.39 0.37 0.43 0.53 0.49
    Interest coverage 15.40 18.10 15.88 2.65 3.97

    Source: Based on data from Delta Air Lines Inc. Annual Reports

    Ratio Description The company
    Debt-to-equity ratio A solvency ratio calculated as total debt divided by total shareholders' equity. Delta Air Lines Inc.'s debt-to-equity ratio improved from 2015 to 2016 but then slightly deteriorated from 2016 to 2017.
    Debt-to-capital ratio A solvency ratio calculated as total debt divided by total debt plus shareholders' equity. Delta Air Lines Inc.'s debt-to-capital ratio improved from 2015 to 2016 but then slightly deteriorated from 2016 to 2017.
    Interest coverage ratio A solvency ratio calculated as EBIT divided by interest payments. Delta Air Lines Inc.'s interest coverage ratio improved from 2015 to 2016 but then deteriorated significantly from 2016 to 2017.

    Debt to Equity

    Delta Air Lines Inc., debt to equity calculation, comparison to benchmarks

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    Dec 31, 2017 Dec 31, 2016 Dec 31, 2015 Dec 31, 2014 Dec 31, 2013
    Selected Financial Data (USD $ in millions)
    Current maturities of long-term debt and capital leases 2,242  1,131  1,563  1,216  1,547 
    Long-term debt and capital leases, excluding current maturities 6,592  6,201  6,766  8,561  9,795 
    Total debt 8,834  7,332  8,329  9,777  11,342 
    Stockholders' equity 13,910  12,287  10,850  8,813  11,643 
    Ratio
    Debt to equity1 0.64 0.60 0.77 1.11 0.97
    Benchmarks
    Debt to Equity, Competitors
    Booking Holdings Inc. 0.85 0.73 0.70 0.45 0.28
    Marriott International Inc. 2.21 1.59 – – –
    McDonald's Corp. – – 3.40 1.17 0.88
    Starbucks Corp. 0.72 0.61 0.40 0.39 0.29
    Debt to Equity, Sector
    Travel & Leisure 1.93 1.69 1.56 1.04 0.85
    Debt to Equity, Industry
    Consumer Services 1.08 0.98 0.93 0.76 0.66

    Source: Based on data from Delta Air Lines Inc. Annual Reports

    2017 Calculations

    1 Debt to equity = Total debt ÷ Stockholders' equity
    = 8,834 ÷ 13,910 = 0.64

    Ratio Description The company
    Debt-to-equity ratio A solvency ratio calculated as total debt divided by total shareholders' equity. Delta Air Lines Inc.'s debt-to-equity ratio improved from 2015 to 2016 but then slightly deteriorated from 2016 to 2017.

    Debt to Capital

    Delta Air Lines Inc., debt to capital calculation, comparison to benchmarks

    Microsoft Excel LibreOffice Calc
    Dec 31, 2017 Dec 31, 2016 Dec 31, 2015 Dec 31, 2014 Dec 31, 2013
    Selected Financial Data (USD $ in millions)
    Current maturities of long-term debt and capital leases 2,242  1,131  1,563  1,216  1,547 
    Long-term debt and capital leases, excluding current maturities 6,592  6,201  6,766  8,561  9,795 
    Total debt 8,834  7,332  8,329  9,777  11,342 
    Stockholders' equity 13,910  12,287  10,850  8,813  11,643 
    Total capital 22,744  19,619  19,179  18,590  22,985 
    Ratio
    Debt to capital1 0.39 0.37 0.43 0.53 0.49
    Benchmarks
    Debt to Capital, Competitors
    Booking Holdings Inc. 0.46 0.42 0.41 0.31 0.22
    Marriott International Inc. 0.69 0.61 7.94 2.39 1.81
    McDonald's Corp. 1.12 1.09 0.77 0.54 0.47
    Starbucks Corp. 0.42 0.38 0.29 0.28 0.22
    Debt to Capital, Sector
    Travel & Leisure 0.66 0.63 0.61 0.51 0.46
    Debt to Capital, Industry
    Consumer Services 0.52 0.50 0.48 0.43 0.40

    Source: Based on data from Delta Air Lines Inc. Annual Reports

    2017 Calculations

    1 Debt to capital = Total debt ÷ Total capital
    = 8,834 ÷ 22,744 = 0.39

    Ratio Description The company
    Debt-to-capital ratio A solvency ratio calculated as total debt divided by total debt plus shareholders' equity. Delta Air Lines Inc.'s debt-to-capital ratio improved from 2015 to 2016 but then slightly deteriorated from 2016 to 2017.

    Interest Coverage

    Delta Air Lines Inc., interest coverage calculation, comparison to benchmarks

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    Dec 31, 2017 Dec 31, 2016 Dec 31, 2015 Dec 31, 2014 Dec 31, 2013
    Selected Financial Data (USD $ in millions)
    Net income 3,577  4,373  4,526  659  10,540 
    Add: Income tax expense 2,124  2,263  2,631  413  (8,013)
    Add: Interest expense, net 396  388  481  650  852 
    Earnings before interest and tax (EBIT) 6,097  7,024  7,638  1,722  3,379 
    Ratio
    Interest coverage1 15.40 18.10 15.88 2.65 3.97
    Benchmarks
    Interest Coverage, Competitors
    Booking Holdings Inc. 18.32 14.05 20.52 34.84 28.57
    Marriott International Inc. 10.85 6.06 8.51 10.46 8.48
    McDonald's Corp. 10.31 8.76 11.27 13.92 16.72
    Starbucks Corp. 47.68 52.64 56.36 50.29 -7.18
    Interest Coverage, Sector
    Travel & Leisure 14.23 13.03 15.50 11.54 9.53
    Interest Coverage, Industry
    Consumer Services 8.17 8.85 10.01 9.64 10.09

    Source: Based on data from Delta Air Lines Inc. Annual Reports

    2017 Calculations

    1 Interest coverage = EBIT ÷ Interest expense
    = 6,097 ÷ 396 = 15.40

    Ratio Description The company
    Interest coverage ratio A solvency ratio calculated as EBIT divided by interest payments. Delta Air Lines Inc.'s interest coverage ratio improved from 2015 to 2016 but then deteriorated significantly from 2016 to 2017.