Delta Air Lines Inc DAL
Q2 2010 Earnings Call Transcript

Transcript Call Date 07/19/2010

Operator: Good morning, ladies and gentlemen, and welcome to the Delta Air Lines June 2010 Quarter Financial Results Conference Call. My name is Cynthia, and I will be your coordinator. At this time, all participants are in a listen-only mode until we conduct the question-and-answer session following the presentation.

I would now like to turn the conference over to (Jill Greer), Director of Investor Relations for Delta Air Lines.

Jill Greer - Director of IR: Thanks, Cyndi and good morning, everyone. Thanks for joining us to discuss Delta's June quarter financial results. Joining us from Atlanta today are Richard Anderson, Delta’s CEO; Ed Bastian, our President; and Hank Halter, our CFO. Also in the room for the Q&A session will be Glen Hauenstein, EVP of Network and Revenue Management; Steve Gorman, Chief Operating Officer; Mike Campbell, our EVP of HR and Labor Relations; Ben Hirst, our General Counsel; and Ned Walker, our Chief Communications Officer.

Richard will begin the call with a Delta and industry overview, Ed will then address our June 2010 quarter financial and revenue performance, Hank will conclude with a review of Delta's cost performance and liquidity.

We have allocated 20 to 25 minutes for management comments. After their comments, we've allocated 25 minutes for questions with the analysts. We'll then conclude the call with a 10-minute Q&A for the media. When we get to the Q&A, I'd like to request that you limit yourself to two questions; that should allow us to get to as many questions as possible during today’s call.

Today's discussion contains forward-looking statements that represent our beliefs or expectations about future events. All forward-looking statements involve risks and uncertainties that could cause the actual results to differ materially from the forward-looking statements. Some of the factors that could cause such differences are described in Delta's SEC filings. We’ll also discuss certain non-GAAP financial measures. All results exclude special items unless otherwise noted. You can find the reconciliation of the non-GAAP measures on our Investor Relations website at

And with that I'll turn the call over to our Chief Executive Officer, Richard Anderson.

Richard H. Anderson - CEO: Thanks, Jill. Good morning, everyone, and thanks for joining us on the call today. This morning we announced a profit of $549 million for the June quarter. This is a $748 million improvement year-on-year. Our operating margin of 11.4% is the best we've posted in a decade.

I want to thank the Delta team for their hard work and dedication. Their efforts have gotten the company to a place where we can post these levels of profits in the early stages of a global economic recovery. It's Delta's longstanding commitment to share the company's success with the people who make that success a reality, so I am happy to announce that our results include $90 million in expense for profit sharing that will be paid out to our employees.

The business is performing well, and we still have significant opportunity for improvement ahead. Ed and Hank will go through the details, but simply put revenues increased 17% or $1.2 billion and our operating expenses, excluding profit sharing and fuel, were flat. The revenue environment is improving. I would characterize it as good but not yet great, and as we continue to strengthen our business we will benefit from what we expect will be continued positive momentum.

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