NEW YORK, Dec. 13, 2018 /PRNewswire/ -- Leadership at
Delta (NYSE: DAL) today will highlight its long-term business
strategy and 2019 financial targets at the company's annual
Investor Day.
"Delta is leading the way with our powerful brand and unmatched
competitive advantages. In 2018, the Delta people have delivered
another year of industry-leading financial results, sustained
improvement in customer satisfaction and solid returns for our
owners," said Ed Bastian, Delta's
chief executive officer. "We have a bright future ahead and are
confident in our plan for double-digit earnings growth in 2019 of
$6 to $7 per share with both top-line growth and margin
expansion."
The leadership team will discuss:
- How the company's powerful consumer brand, combined with
Delta's unmatched competitive advantages – culture, operational
reliability, global network, customer loyalty and an
investment-grade balance sheet – create opportunities for sustained
revenue and earnings growth.
- Expectations for 2019 profits above $5
billion for a fifth consecutive year, driven by revenue
growth and margin expansion, with a 15 percent after-tax return on
invested capital.
- Top-line growth in 2019 of 4 to 6 percent, driven by an
increasingly diverse revenue stream, premium product mix, and a
pipeline of initiatives.
- Non-fuel unit cost growth trajectory improving as efficiency
initiatives gain momentum and Delta's fleet transformation
continues.
"Delta has a great runway of opportunity as we continue to
provide superior travel experiences and industry-leading
reliability for our customers" said Glen
Hauenstein, Delta's President. "Our pipeline of commercial
initiatives and brand momentum drive our expectations for 4 to 6
percent revenue growth in 2019."
Delta will outline its financial framework and introduce
financial targets for 2019, including:
- Diluted earnings per share of $6
to $7, with pre-tax margin expansion
of approximately 100 basis points at midpoint
- Top-line growth of 4 to 6 percent on 3 percent capacity
expansion
- Non-fuel unit cost growth of approximately one percent
"2018 has demonstrated Delta's resiliency as we've overcome 90
percent of a $2 billion headwind from
fuel costs" said Paul Jacobson,
Delta's Chief Financial Officer. "With a structurally improved
business model that produces strong cash generation, we remain
committed to continued reinvestment in our business, an
investment-grade balance sheet and industry-leading shareholder
returns."
The Investor Day event will feature presentations and Q&A
sessions with:
- Ed Bastian, Chief Executive
Officer
- Glen Hauenstein, President
- Gil West, Chief Operating
Officer
- Tim Mapes, Chief Marketing
Officer
- Eric Phillips, Senior Vice
President – Revenue Management
- Rahul Samant, Chief Information
Officer
- Joanne Smith, Chief Human
Resources Officer
- Paul Jacobson, Chief Financial
Officer
Delta invites shareholders, the investment community and the
media to listen to a live webcast of this event today
from 8:30 a.m. to 1 p.m.
ET. A live webcast will be available at
http://ir.delta.com/news-and-events/calendar/. An online
replay will be available at the same site shortly after the webcast
is complete.
Delta Air Lines serves more than 180 million customers each
year. In 2018, Delta was named to Fortune's top 50 Most Admired
Companies in addition to being named the most admired airline for
the seventh time in eight years. Additionally, Delta has ranked
No.1 in the Business Travel News Annual Airline survey for an
unprecedented eight consecutive years. With an industry-leading
global network, Delta and the Delta Connection carriers offer
service to 302 destinations in 52 countries on six continents.
Headquartered in Atlanta, Delta
employs more than 80,000 employees worldwide and operates a
mainline fleet of more than 800 aircraft. The airline is a founding
member of the SkyTeam global alliance and participates in the
industry's leading transatlantic joint venture with Air
France-KLM and Alitalia as well as a joint venture with Virgin
Atlantic. Including its worldwide alliance partners, Delta offers
customers more than 15,000 daily flights, with key hubs and markets
including Amsterdam, Atlanta, Boston, Detroit, Los
Angeles, Mexico City,
Minneapolis/St. Paul, New York-JFK
and LaGuardia, London-Heathrow, Paris-Charles de Gaulle, Salt Lake City, São Paulo, Seattle, Seoul, and Tokyo-Narita.
Delta has invested billions of dollars in airport facilities,
global products and services, and technology to enhance the
customer experience in the air and on the ground. Additional
information is available on the Delta News Hub, as well as
delta.com, Twitter @DeltaNewsHub and Facebook.com/delta.
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
impact of fuel hedging activity including rebalancing our hedge
portfolio, recording mark-to-market adjustments or posting
collateral in connection with our fuel hedge contracts; the
availability of aircraft fuel; the performance of our significant
investments in airlines in other parts of the world; the possible
effects of accidents involving our aircraft; breaches or security
lapses in our information technology systems; disruptions in our
information technology infrastructure; our dependence on technology
in our operations; the restrictions that financial covenants in our
financing agreements could have on our financial and business
operations; labor issues; the effects of weather, natural disasters
and seasonality on our business; the effects of an extended
disruption in services provided by third party regional carriers;
failure or inability of insurance to cover a significant liability
at Monroe's Trainer refinery; the
impact of environmental regulation on the Trainer refinery,
including costs related to renewable fuel standard regulations; our
ability to retain senior management and key employees; damage to
our reputation and brand if we are exposed to significant adverse
publicity through social media; the effects of terrorist attacks or
geopolitical conflict; competitive conditions in the airline
industry; interruptions or disruptions in service at major airports
at which we operate; the effects of extensive government regulation
on our business; the sensitivity of the airline industry to
prolonged periods of stagnant or weak economic conditions;
uncertainty in economic conditions and regulatory environment in
the United Kingdom related to the
exit of the United Kingdom from
the European Union; and the effects of the rapid spread of
contagious illnesses.
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 Annual Report on Form 10-K for the fiscal
year ended December 31, 2017 and our
10-Q for the quarterly period ended March
31, 2018. Caution should be taken not to place undue
reliance on our forward-looking statements, which represent our
views only as of December 13, 2018,
and which we have no current intention to update.
Non-GAAP Financial Measures
The following tables show reconciliations of non-GAAP financial
measures. The reasons Delta uses these measures are described
below. Reconciliations may not calculate due to rounding.
Delta sometimes uses information ("non-GAAP financial measures")
that is derived from the Consolidated Financial Statements, but
that is not presented in accordance with accounting principles
generally accepted in the U.S. ("GAAP"). Under the U.S. Securities
and Exchange Commission rules, non-GAAP financial measures may be
considered in addition to results prepared in accordance with GAAP,
but should not be considered a substitute for or superior to GAAP
results. The tables below show reconciliations of non-GAAP
financial measures used in this presentation to the most directly
comparable GAAP financial measures.
We do not reconcile certain forward looking non-GAAP financial
measures because mark-to-market ("MTM") adjustments and settlements
will not be known until the end of the period and could be
significant.
Pre-Tax Income, Adjusted
We adjust pre-tax income for
the following items to determine pre-tax income, adjusted:
Mark-to-market ("MTM")
adjustments and settlements. MTM adjustments are defined as
fair value changes recorded in periods other than the settlement
period. Such fair value changes are not necessarily indicative of
the actual settlement value of the underlying hedge in the contract
settlement period. Settlements represent cash received or paid on
hedge contracts settled during the period.
Equity investment MTM
adjustments. We record our proportionate share of earnings/loss
from our equity investments in Virgin Atlantic and Aeroméxico in
non-operating expense. We adjust for our equity method investees'
MTM adjustments to allow investors to better understand and analyze
our core operational performance in the periods shown.
|
|
Year
Ended
|
|
Year
Ended
|
|
Year
Ended
|
(in
billions)
|
December 31,
2017
|
|
December 31,
2016
|
|
December 31,
2015
|
GAAP
|
$
|
5.5
|
|
$
|
6.4
|
|
$
|
7.2
|
Adjusted
for:
|
|
|
|
|
|
MTM adjustments and
settlements
|
(0.3)
|
|
(0.4)
|
|
(1.3)
|
Equity investment MTM
adjustments
|
0.1
|
|
(0.1)
|
|
-
|
Total
adjustments
|
(0.2)
|
|
(0.5)
|
|
(1.3)
|
Non-GAAP
|
$
|
5.3
|
|
$
|
5.9
|
|
$
|
5.9
|
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SOURCE Delta Air Lines