Delta Air Lines Inc DAL
Q4 2010 Earnings Call Transcript

Transcript Call Date 01/18/2011

Operator: Good morning, ladies and gentlemen, and welcome to the Delta Air Lines December 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. As a reminder, today's call is being recorded.

I would now like to turn the call over to (Ms. Jill Sullivan Greer), Director of Investor Relations for Delta.

Jill Sullivan Greer - Director, IR: Thanks, Cynthia. Good morning, everyone, and thanks for joining us for our December quarter call. Joining us from Atlanta today are Richard Anderson, Delta's CEO; Ed Bastian, our President; and Hank Halter, our Chief Financial Officer. Also with us for the Q&A is Glen Hauenstein, our EVP of Network, Revenue Management and Marketing; Mike Campbell, our EVP of HR and Labor Relations; Steve Gorman, our Chief Operating Officer; Ben Hirst, our General Counsel; and Ned Walker, our Chief Communications Officer.

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

We've allocated about 25 minutes for management comments. After their comments, we have 25 minutes for questions from the analysts. We'll then conclude the call with a 10-minute Q&A with 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 in as many questions as possible during the 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 and some of the factors that may cause such differences are described in Delta's SEC filings.

We’ll also discuss non-GAAP financial measures on today's call. All results exclude special items unless otherwise noted and you can find the reconciliation of non-GAAP measures on our IR page at

With that, I will turn the call over to Richard.

Richard H. Anderson - CEO: Good morning, everyone. Thank you, Jill. We appreciate your joining us this morning for our earnings call. This morning we announced $158 million profit for the December quarter, and a $1.4 billion profit for 2010. These results reflect the success of our merger, the success of our network fleet and alliance strategies, the ongoing investments in our business, our stable employee relations, and our commitment to cost discipline and debt reduction.

We also recognize that these results would not have been possible without the dedication and determination of Delta employees worldwide, and I heartfeltly thank them for their hard work. We are pleased to recognize their contribution to this success with a $313 million profit sharing payment to be awarded in mid-February.

Looking back on the past year, we completed the merger integration. We had top line growth of 13%, driven not only by higher passenger sales and revenues from ancillary products and services, but also contributions from cargo, our MRO business, SkyMiles, Delta Global Services, MLT Vacations, and Delta Private Jets. We showed capacity discipline limiting our all-in capacity growth for 2010 at 1% with unit revenues up 12%. While our 2011 capacity plan is currently planned at 1% to 3%, we are watching fuel prices and are prepared to adjust capacity with flexibility provided by a significant number of paid for airplanes.

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