ACL65PILOT
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[FONT="]Delta Air Lines Announces $549 Million Profit Excluding Special Items[/FONT]
[FONT="]Company Reports GAAP Profit of $467 Million [/FONT]
[FONT="]Revenue Environment[/FONT]
[FONT="]Delta's operating revenue grew $1.2 billion, or 17% in the June 2010 quarter compared to the 2009 quarter.[/FONT]
[FONT="]"We are seeing strong improvements in these early stages of the economic recovery and believe there's room for more revenue growth as the economy continues to stabilize," said Ed Bastian, Delta's president. "We anticipate double-digit year over year unit revenue gains for the September quarter."[/FONT]
[FONT="]Cost Performance[/FONT]
[FONT="]In the June 2010 quarter, Delta's operating expense increased $317 million year over year due to higher fuel price and profit sharing expense, which were partially offset by incremental merger cost synergies.[/FONT]
[FONT="]Consolidated unit cost (CASM(2)), excluding fuel expense, profit sharing and special items, was flat in the June 2010 quarter on a year-over-year basis, despite 1% lower capacity. Consolidated CASM increased 5% due to higher fuel price and profit sharing expense.[/FONT]
[FONT="]Fuel Price and Related Hedges[/FONT]
[FONT="]Delta hedged 51% of its fuel consumption for the June 2010 quarter, for an average fuel price(3) of $2.32 per gallon. The table below represents fuel hedges Delta had in place as of July 16, 2010: [/FONT]
[FONT="]Liquidity Position [/FONT]
[FONT="]As of June 30, 2010, Delta had $6.0 billion in unrestricted liquidity, including $4.4 billion in cash and $1.6 billion in undrawn revolving credit facilities. During the quarter, the company prepaid its $914 million revolving credit facility, which is now fully undrawn and available for future cash needs.[/FONT]
[FONT="]Operating cash flow during the June 2010 quarter was $1 billion, driven by the company's profitability and advance ticket sales, and free cash flow was $778 million. In the June quarter, Delta contributed nearly $500 million to its pension plans and completed its required 2010 pension funding. Year to date, Delta has generated $2.0 billion in operating cash flow and $1.4 billion in free cash flow.[/FONT]
[FONT="]Capital expenditures during the quarter were $283 million, which included $154 million for investments in aircraft, parts and modifications.[/FONT]
[FONT="]Subsequent to the end of the quarter, Delta completed its $450 million 2010-1A enhanced equipment trust certificate (EETC) offering. The certificates will be secured by 22 aircraft that are currently included in Delta's 2000-1 EETC, which matures in November 2010, and two 777LR aircraft which were delivered in March 2010.[/FONT]
[FONT="]Total debt payments in the June 2010 quarter were $345 million, of which $70 million was paid before scheduled maturity. At June 30, Delta's adjusted net debt was $15.6 billion, an $800 million reduction from March 31, 2010.[/FONT]
[FONT="]"Delta exhibited strong cost performance this quarter as merger synergies and productivity offset cost pressures in the business. Synergies have exceeded our expectations and will be a key factor as we strive to keep our non-fuel unit costs flat for the full year," said Hank Halter, Delta's chief financial officer. "In addition, we continue to make excellent progress in delevering our balance sheet – generating nearly $800 million in free cash flow this quarter and reducing adjusted net debt to $15.6 billion."[/FONT]
[FONT="]Company Reports GAAP Profit of $467 Million [/FONT]
- [FONT="]Delta's net income for the June 2010 quarter was $549 million, or $0.65 per diluted share, excluding special items(1). This is a $748 million improvement year over year. [/FONT]
- [FONT="]Delta's net income was $467 million, or $0.55 per diluted share, for the June 2010 quarter.[/FONT]
- [FONT="]Results include $90 million in profit sharing expense, in recognition of Delta employees' achievements toward meeting the company's financial targets.[/FONT]
- [FONT="]Delta generated more than $1 billion in operating cash flow and ended the June 2010 quarter with $6.0 billion in unrestricted liquidity. [/FONT]
[FONT="]Revenue Environment[/FONT]
[FONT="]Delta's operating revenue grew $1.2 billion, or 17% in the June 2010 quarter compared to the 2009 quarter.[/FONT]
- [FONT="]Passenger revenue[/FONT][FONT="] increased 19%, or $1.1 billion, compared to the prior year period on 1% lower capacity. Passenger unit revenue (PRASM) increased 19.4%, driven by a 17% improvement in yield and a 1.9 point improvement in load factor.[/FONT]
- [FONT="]Cargo revenue[/FONT][FONT="] increased 22%, or $38 million, on higher cargo volume and yield. [/FONT]
- [FONT="]Other, net revenue[/FONT][FONT="] increased 3%, or $24 million, primarily due to increased baggage fees.[/FONT]
[FONT="]"We are seeing strong improvements in these early stages of the economic recovery and believe there's room for more revenue growth as the economy continues to stabilize," said Ed Bastian, Delta's president. "We anticipate double-digit year over year unit revenue gains for the September quarter."[/FONT]
[FONT="]Cost Performance[/FONT]
[FONT="]In the June 2010 quarter, Delta's operating expense increased $317 million year over year due to higher fuel price and profit sharing expense, which were partially offset by incremental merger cost synergies.[/FONT]
[FONT="]Consolidated unit cost (CASM(2)), excluding fuel expense, profit sharing and special items, was flat in the June 2010 quarter on a year-over-year basis, despite 1% lower capacity. Consolidated CASM increased 5% due to higher fuel price and profit sharing expense.[/FONT]
[FONT="]Fuel Price and Related Hedges[/FONT]
[FONT="]Delta hedged 51% of its fuel consumption for the June 2010 quarter, for an average fuel price(3) of $2.32 per gallon. The table below represents fuel hedges Delta had in place as of July 16, 2010: [/FONT]
[FONT="]Liquidity Position [/FONT]
[FONT="]As of June 30, 2010, Delta had $6.0 billion in unrestricted liquidity, including $4.4 billion in cash and $1.6 billion in undrawn revolving credit facilities. During the quarter, the company prepaid its $914 million revolving credit facility, which is now fully undrawn and available for future cash needs.[/FONT]
[FONT="]Operating cash flow during the June 2010 quarter was $1 billion, driven by the company's profitability and advance ticket sales, and free cash flow was $778 million. In the June quarter, Delta contributed nearly $500 million to its pension plans and completed its required 2010 pension funding. Year to date, Delta has generated $2.0 billion in operating cash flow and $1.4 billion in free cash flow.[/FONT]
[FONT="]Capital expenditures during the quarter were $283 million, which included $154 million for investments in aircraft, parts and modifications.[/FONT]
[FONT="]Subsequent to the end of the quarter, Delta completed its $450 million 2010-1A enhanced equipment trust certificate (EETC) offering. The certificates will be secured by 22 aircraft that are currently included in Delta's 2000-1 EETC, which matures in November 2010, and two 777LR aircraft which were delivered in March 2010.[/FONT]
[FONT="]Total debt payments in the June 2010 quarter were $345 million, of which $70 million was paid before scheduled maturity. At June 30, Delta's adjusted net debt was $15.6 billion, an $800 million reduction from March 31, 2010.[/FONT]
[FONT="]"Delta exhibited strong cost performance this quarter as merger synergies and productivity offset cost pressures in the business. Synergies have exceeded our expectations and will be a key factor as we strive to keep our non-fuel unit costs flat for the full year," said Hank Halter, Delta's chief financial officer. "In addition, we continue to make excellent progress in delevering our balance sheet – generating nearly $800 million in free cash flow this quarter and reducing adjusted net debt to $15.6 billion."[/FONT]
