Delta Air Lines Inc. (NYSE:DAL)

The financial data reveals notable fluctuations in cash flow metrics over the five-year period from 2017 to 2021.

Net cash provided by (used in) operating activities

There was a consistent increase in net cash from operating activities from 2017 through 2019, rising from 5,148 million to 8,425 million USD. This upward trajectory indicates improving operational cash generation during this period. However, 2020 saw a sharp reversal with a substantial negative cash flow of -3,793 million USD, highlighting significant operational challenges. The following year, 2021 showed a recovery with positive net cash at 3,264 million USD, though this level remained below the earlier peak levels.

Free cash flow to equity (FCFE)

FCFE exhibited a generally positive and growing trend from 2017 to 2020, starting at 2,453 million USD, rising steadily to 3,976 million USD in 2019, and then peaking dramatically at 11,800 million USD in 2020. The extraordinary spike in 2020 may suggest exceptional financing activities, asset sales, or other one-time cash inflows contributing to equity holders beyond operational results. In 2021, FCFE declined sharply to -3,915 million USD, indicating significant cash outflows or diminished cash generation available to equity holders compared to previous years.

Overall, the data reflects operational strength leading up to 2019, a pronounced impact likely due to extraordinary events in 2020 affecting operational cash flow, and a partial rebound in 2021. The FCFE pattern, particularly the anomalous peak in 2020 followed by a steep decline, underscores volatility in cash flow available to equity stakeholders, suggesting that external factors or non-operational cash flows played a major role during this timeframe.

The analysis of the provided financial data reveals several key trends over the five-year period ending December 31, 2021.

Share Price

The share price experienced moderate fluctuations, beginning at $53.46 in 2017 and remaining relatively stable through 2018 and 2019, peaking at $59.13 in 2019. However, there was a notable decline in 2020 and 2021, with the price dropping to $43.29 and then slightly decreasing further to $42.33. This trend indicates a weakening market valuation during these latter years.

Free Cash Flow to Equity (FCFE) per Share

FCFE per share showed a significant upward trend from 2017 to 2020, rising from $3.47 to a peak of $18.49 in 2020. This sharp increase suggests a substantial improvement in the company’s ability to generate free cash flow for shareholders during this period. Yet, there was a drastic reversal in 2021, with FCFE per share turning negative at -$6.12, indicating a potential liquidity or profitability issue impacting shareholder returns.

Price to FCFE Ratio (P/FCFE)

The price-to-FCFE ratio declined steadily across the years for which data is available. Beginning at 15.41 in 2017, the ratio decreased to 13.66, then further dropped to 9.52 in 2019, and reached a low of 2.34 in 2020. This pattern reflects either an increasing FCFE relative to share price or a declining share price relative to FCFE, suggestive of changing investor perceptions or company fundamentals. The absence of data for 2021 limits the ability to assess the most recent trend.

Overall, the data indicates that while the company demonstrated strong free cash flow generation up to 2020, the subsequent negative FCFE in 2021 and declining share price suggest emerging concerns about financial performance or market conditions in the most recent year. The decreasing P/FCFE ratio up to 2020 reflects a more favorable valuation relative to cash flow during that period, which may have adjusted due to the negative cash flow observed later.