Attached files
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| 8-K - CURRENT REPORT ON FORM 8-K - DELTA AIR LINES, INC. | delta_8k-061510.htm |
| EX-99.1 - PRESENTATION - DELTA AIR LINES, INC. | delta_8k-ex9901.htm |
Exhibit 99.2
This investor update provides Delta’s guidance for the June quarter 20101,2.
Advance Revenue Trends
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Projected system load factors for June and July 2010 of 87% are expected to be consistent with the prior year period.
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The company expects June quarter passenger RASM to increase approximately 20%, compared to the same period last year.
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Corporate contract volume was up 35% year over year and the associated revenue was up 63%, for the week ended May 23, 2010.
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Profit Sharing
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Delta employees participate in a profit sharing program. The June quarter profit sharing expense is estimated at $85 million.
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Liquidity and Cash Flow
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Delta expects to end the June 2010 quarter with $6.0 billion of unrestricted liquidity.
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In 2010, the company projects free cash flow of $700 million in the June quarter and $2 billion for the full year.
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Key Financial Metrics
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June Quarter 2010
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Operating margin
(includes profit sharing expense)
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10 – 11%
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EBITDAR
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$1.4 billion
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Consolidated fuel price, including taxes and hedges
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$ 2.32
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Capital expenditures
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$350 million
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Cargo and other revenue
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$1.2 billion
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Non-operating expense3
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$350 million
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June Quarter 2010 vs. June Quarter 2009
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Consolidated CASM, excluding fuel and profit sharing expense
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Up 1%
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Mainline CASM, excluding fuel and profit sharing expense
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Up 2%
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System capacity
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Flat
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Domestic
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Flat
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International
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Down 1%
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Mainline capacity
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Flat
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Domestic
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Up 2%
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International
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Down 1%
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Fuel hedge update
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As of 6/11/2010
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% of Projected Fuel Requirements Hedged
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June Quarter 2010
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Call options
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28%
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Collars
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11%
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Swaps
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12%
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Total
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51%
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Projected fuel price/gallon
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$2.32
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Projected fuel price includes:
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Assumed $88.44 all-in price per barrel for crude oil plus refining spread
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Hedge gain of $0.04/gallon
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$0.25 for taxes, transportation and hedge premiums
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Share count
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Delta expects approximately 842 million diluted weighted average shares, approximately 834 million basic weighted average shares outstanding for the June 2010 quarter.
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Notes
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1
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Delta excludes special items because management believes the exclusion of these items is helpful to investors in evaluation of the company’s recurring operational performance.
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2
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Delta is unable to reconcile forward looking projections to GAAP as the nature or amount of special items cannot be estimated at this time.
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3
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The June quarter 2009 included a gain of $45 million related to SFAS 133.
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Forward Looking Statements
Statements in this Investor Update that are not historical facts, including statements regarding our estimates, expectations, beliefs, intentions, projections or strategies for the future, may be “forward-looking statements” as defined in the Private Securities Litigation Reform Act of 1995. All forward-looking statements involve a number of risks and uncertainties that could cause actual results to differ materially from the estimates, expectations, beliefs, intentions, projections and strategies reflected in or suggested by the forward-looking statements. These risks and uncertainties include, but are not limited to, the cost of aircraft fuel; the effects of the global recession; the effects of the global financial crisis; the impact of posting collateral in connection with our fuel hedge contracts; the impact that our indebtedness will have on our financial and operating activities and our ability to incur additional debt; the restrictions that financial covenants in our financing agreements will have on our financial and business operations; labor issues; the ability to realize the anticipated benefits of our merger with Northwest; the integration of the Delta and Northwest workforces; interruptions or disruptions in service at one of our hub airports; our increasing dependence on technology in our operations; our ability to retain management and key employees; the ability of our credit card processors to take significant holdbacks in certain circumstances; the effects of terrorist attacks; and competitive conditions in the airline industry.
Additional information concerning risks and uncertainties that could cause differences between actual results and forward-looking statements is contained in our Securities and Exchange Commission filings, including our Form 10-K for the year ended December 31, 2009 and Quarterly Report on form 10-Q for the quarterly period ended March 31, 2010. Caution should be taken not to place undue reliance on our forward-looking statements, which represent our views only as of June 15, 2010 and which we have no current intention to update.