Delta Air Lines, Inc. (NYSE:DAL) Q4 2019 Earnings Conference Call - Final Transcript

Jan 14, 2020 • 10:00 am ET

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Delta Air Lines, Inc. (NYSE:DAL) Q4 2019 Earnings Conference Call - Final Transcript

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Presentation
Operator
Operator

Good morning, everyone, and welcome to the Delta Air Lines December Quarter and Full-Year 2019 Financial Results Conference Call. My name is Shannon and I will be your coordinator. At this time, all participants are in a listen-only mode until we conduct a question-and-answer session following the presentation. As a reminder, today's call is being recorded.

I would now like to turn the conference over to Jill Greer, Vice President of Investor Relations. Please go ahead, ma'am.

Executive
Jill Greer

Thanks, Shannon. Good morning, everyone and thanks for joining us on our December quarter and full year call. Joining us from Atlanta today are our CEO, Ed Bastian; our President, Glen Hauenstein; and our CFO, Paul Jacobson. Our entire leadership team is here in the room with us for the Q&A. Ed will open the call and give an overview of Delta's financial performance, Glen will then address the revenue environment, and Paul will conclude with a review of our cost performance and cash flow.

To get in as many questions as possible during the Q&A, please limit yourself to one question and a brief follow-up.

Today's discussion does contain 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 may cause such differences are described in our SEC filings.

We'll also discuss non-GAAP financial measures. All results exclude special items unless otherwise noted and you can find a reconciliation of our non-GAAP measures on the Investor Relations page at ir.delta.com.

And with that, Ed?

Executive
Ed Bastian

Thanks, Jill. Good morning, everyone. We appreciate you joining us today. Earlier, Delta reported our full-year results, including the December quarter pre-tax profit of $1.4 billion, which is up $240 million compared to last year. Our EPS in the quarter increased 31% to $1.70, with pre-tax margins expanding 140 basis points to 12.4%. The December quarter performance was a great finish to what was truly an outstanding year on all fronts; strategically with the American Express renewal and the announcement of LATAM and we also have partnerships operationally with best-in-class completion factor and on-time performance, and financially with industry-leading revenue, profits, and cash flow.

2019 was the best year in our history. The topline grew 7.5% to $47 billion, positioning Delta as the largest carrier by revenue in the world. We delivered $6.2 billion in pre-tax income, an improvement of more than $1 billion over 2018, setting a new record for Delta and the US airline industry. Full-year earnings per share improved 30% over the prior year and we generated $4.2 billion of free cash flow with $3 billion returned to owners. These results simply would not be possible without the incredible work of our Delta team. I am pleased we'll recognize our employees' performance in 2019 with $1.6 billion profit sharing. This marks the highest profit sharing in Delta's history and is the sixth consecutive year of $1 billion or more in