Delta Air Lines, Inc.

Good morning, everyone, and welcome to the Delta Airlines June quarter financial results conference call. My name is Jake, 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.

Thanks, Jake. Good morning, and thanks to everyone for joining us on our June quarter earnings call. Joining us from Atlanta today are our CEO, Ed Bastian, our President, Glenn Hauenstein, and our CFO, Paul Jacobson. Our entire leadership team is here in the room for the Q&A session. Ed will open the call and give an overview of Delta's performance. One 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 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. Some of the factors that may cause such differences are described in Delta's SEC filing. We'll also discuss non-GAAP financial measures. All results exclude special items unless otherwise noted. You can find a reconciliation of our non-GAAP measures on the IR page at ir.delta.com. And with that, we're good.

Thanks, Jill. Good morning, everyone. Thanks for joining us today. Our record June quarter financial and operating results demonstrate the delta difference in action. We are translating our powerful brand, unmatched competitive advantages and pipeline of initiatives to drive earnings growth, margin expansion and solid returns for our owners. Earlier today, we reported a June quarter pre tax profit of $2 billion, with earnings increasing 32% to $2.35 per share. We expanded operating margins by more than two points and generated $1.8 billion in free cash flow. We continue to run the best operation in the global industry by far. To date, we've achieved 82 days without a single cancellation across the Delta system, a 26% improvement over last year's record performance. And for our mainline product, we've already reached 153 days without a cancellation. This reliability, Combined with the great service our people provide is translating to more customers than ever choosing Delta. As a result, we ran the highest load factors in our history and flew a record 53.9 million passengers in the June quarter. And even with these record volumes, this was the first time in our history that Delta had zero involuntary denied boardings for an entire quarter. This strong demand drove an 8.7% improvement in our top line, and total revenue of $12.5 billion, which marked the highest quarterly result in our history. And our momentum continues to build. We've experienced five of the top ten revenue days in our history just over the last 30 days. With our people consistently delivering best-in-class travel experiences for our customers, we are seeing our net promoter scores reach new heights and our brand affinity grow. We have the world's most valuable airline brands, one that's mentioned not just among the best global airlines, but also alongside top consumer brands. The ascent of our brand is a sign of the trust and preference we're earning from our customers through operational excellence and unmatched service. Our people are the very best in the business, and they are Delta's strongest competitive advantage. They keep climbing, improving year after year, because our customers count on us to connect them to moments that matter around the world every day. And not only do they serve our customers, but they continue to give back to the communities where they live, work and serve. Earlier this week, Delta was recognized by the American Red Cross as the number one corporate blood donor in the country for the second year in a row. This is a fantastic accomplishment. And I want to say congratulations and thank them for their service. So far this year, we have accrued $739 million towards next Valentine's Day profit sharing. Across the business, we are harnessing Delta's strength in quality and innovation to drive improvements in the customer experience, stronger customer loyalty, and profitable global growth. Delta's financial foundation and cash generation are allowing us to sustainably invest across the business at a level no competitor can match. During the first half of the year, we generated $2.5 billion in free cash flow, more than what we produced in all of 2018. positioning us to achieve $4 billion in free cash flow in 2019. We are investing for the future to ensure that our customer experience and brand continue to elevate while ensuring our employees have the right tools to continue to provide best in class customer service. One example is the transformation of our domestic narrow body fleet, which is exciting and Glen will cover the substantial benefits we expect us to deliver to our customers as well as to our owners. On the airport front, we'll invest over $12 billion in terminal facilities at our key hubs over the next five years. This fall, we'll achieve a major milestone in New York as we open Concourse G, the first of four new Delta concourses included in our $3.9 billion project at LaGuardia. By taking control of the construction process, we've been able to build a more efficient facility focused on meeting the needs of our customers. And by utilizing our investment-grade balance sheet, that facility will have a long-term competitive cost advantage. We're also making meaningful investments in our customer-facing technology. Delta.com is one of the top e-commerce sites in the U.S., and we continue to add functionality not only to our site but also to our FlyDelta app. These are our fastest-growing distribution channels with the highest customer satisfaction as more customers are choosing to interact directly with us. Our technology investments are helping us deliver more customized offers and enabling our employees to further differentiate our level of service. Through our single view of the customer technology stream, we are increasingly personalizing interactions, celebrating milestones, and engaging with our customers through their preferred channels as we deepen our customer relationships. We're also continuing to enhance our onboard experience. We just announced that starting in November, We'll launch an industry-leading, reinvented international main cabin experience that will make every customer feel even more valued. We are also taking steps to provide more options for spending time in flight. During the quarter, we took the first steps towards bringing free Wi-Fi to life by completing a two-week test, and we'll conduct more testing in the months ahead to create an experience customers prefer. We are committed to providing the best in-flight entertainment in the sky. It will be another point of differentiation. And finally, as part of the foundation for a global franchise, we have built a $2 billion equity portfolio of strategic partners. The most recent addition was our 4.3% investment in Hanjin KAL, the largest shareholder of Korean Air. We intend to increase our stake to 10% pending regulatory approval. This investment supports the stability and growth of our joint venture with Korean, an important piece of our long-term Pacific strategy. So in summary, we're executing well, and we are confident in our continued momentum. As a result, we are raising our full year earnings guide to $6.75 to $7.25 per share, which is a 25% improvement over last year's EPS. We also announced the board's decision to raise our quarterly dividend by 15% to 40.25 cents per share. This is the sixth year in a row that we've increased the dividend, and this increase represents a 2.7% yield at yesterday's price. Importantly, it demonstrates the sustainability of the Delta business model and our shareholder-friendly capital allocation strategy. We've also raised our total shareholder return expectations for 2019 to $3 billion on the strength of our free cash flow results and our expectations for the rest of this year. The business has positive momentum with significant opportunity ahead. We have a durable foundation of strategic advantages, our culture, leading operational reliability, an unrivaled network, our loyalty program and relationship with American Express, and an investment-grade balance sheet. These advantages, combined with a great brand powered by the very best people in the business, provide the engine to drive meaningful long-term value for our customers, our employees, and our owners. And now I'll turn it over to Glenn and Paul to discuss the details of the quarter.