Delta Air Lines, Inc.

Good morning, everyone, and welcome to the Delta Airlines September quarter financial results conference call. My name is Jake, and I will be your coordinator. 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 will be 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, everyone, and thanks for joining us for our September quarter call. Joining us from Atlanta today are Delta's 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 financial performance. Glenn 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 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, Ted.

Thanks, Jill. Good morning, everyone. We appreciate you joining us today. Demand for the Delta product is as strong as ever, and our powerful brand, unmatched competitive strengths, and pipeline of initiatives are driving earnings growth, margin expansion, and solid returns for our owners. Earlier today, Delta reported a September quarter pre-tax profit of $2 billion, which is up $350 million from last year. Our EPS increased 30% to $2.32 per share, with operating margins expanding by 2.5 points. Importantly, we've already generated $4 billion in free cash flow year-to-date. Our employees continue to deliver the very best operational reliability and service for our customers, even against the summer's backdrop of record passenger volumes, airport construction projects, and difficult weather. We've now had 123 days without a single cancellation across the entire Delta system this year, a 23% improvement over last year's record performance. This unprecedented level of reliability, combined with great service from our team, continue to drive higher customer satisfaction and growing brand affinity for Delta. Year to date, our domestic net promoter score has improved more than five points over the prior year. And we're also seeing positive momentum in international net promoter scores, with opportunity for further improvement as we continue to upgrade cabin interiors and enhance our customer experience. Stronger customer satisfaction is translating into higher revenues. Revenues grew 6.5% to a record $12.6 billion in the quarter, and we now expect to achieve approximately 7% top-line growth for the full year. I want to thank the entire Delta team for producing one of the best quarters in our history. You are the force behind the Delta brand. And to recognize your efforts through a challenging summer, we have accrued another $517 million towards next February's profit sharing. This brings the total for the year to nearly $1.3 billion. In addition, we're making important investments in our people, including improvements to benefits and a 4% base pay increase that went into effect last week for ground employees and flight attendants. Beyond investments in our people, we are continuing to improve the customer experience through a record number of new aircraft deliveries, airport terminal projects, and technology innovations. These investments support long-term growth, industry-leading profitability, and strong cash flow. In many ways, 2019 has been a transformational year for our company. We firmly established Delta as the largest airline in the world, both on revenues and profits, and are solidly on track to produce our fifth straight year with pre-tax profits in excess of $5 billion. We have the world's most valuable airline brand, one that is mentioned not just among the best global airlines, but alongside top consumer brands. And we're building out our portfolio of industry-leading partners across our business. Just two weeks ago, we announced a new strategic partnership with LATAM Airlines. The agreement adds geographic diversity in a fast-growing continent, adding 100 new destinations to our map, and significantly improving our position in South America. Once approved, our proposed JV will move Delta from a current number four position in South America to a combined number one position. We expect this partnership to translate to $1 billion in new annual revenue over the next five years and improve returns in the Latin entity. Along with our existing partnerships with Aeromexico and WestJet, we're creating a true carrier of the Americas, The ability to connect travelers is never before. American Express is another important long-term partner, and the combination of our two brands has created an industry-leading co-brand credit card portfolio. Our recent contract renewal provides a diverse, high-margin revenue stream that we expect to grow to nearly $7 billion by 2023, with further growth through the end of the decade. Last week, we announced a major relaunch of our Delta SkyMiles American Express card portfolio. We are providing our customers with more ways to earn miles and new benefits that deliver an even better travel experience. The investments we're making in our people, product, service, and partnerships are diversifying our revenues and will grow the earnings power of our business for years to come. Important steps on our path to being the world's leading airline. Demand for our product has never been higher. We have grown our revenues by 15% over the last two years. And to ensure that we continue to deliver the very best product and returns in this industry, we need to continue to invest in our people and our service. This volume growth, coupled with challenging weather patterns, has added costs in the back half of the year and will add about one point to our Chasm X fuel run rate in 2020. I am confident that these are the right investments for the health of our brand. And with the productivity still to come from our fleet, facility, and technology investments, we have the right platform to mitigate this cost inflation over the long term. With that said, it is important to note our overall fourth quarter unit costs all in are expected to be down 1% due to the drop in fuel prices, and our margins should expand once again in Q4. In closing, we are on track to deliver a very strong result in 2019. Demand trends remain healthy. and our full-year earnings guidance is for a more than 20% improvement over last year's earnings per share. We have built a durable foundation through our culture, leading operational reliability, unrivaled network, our loyalty program, and relationship with American Express, and an investment-grade balance sheet. These strengths, combined with a great brand powered by the very best professionals in the business, provide the engine to drive long-term value for our owners. I look forward to sharing more details on our strategic outlook and 2020 business plan at our upcoming Investor Day in December. Now, with that, I'd like to turn the call over to Glenn and Paul to go through the details of the quarter.