Delta Air Lines, Inc.

Good morning, everyone, and welcome to the Delta Airlines June Quarter 2023 Financial Results Conference Call. My name is Matthew, and I'll be your coordinator. At this time, all participants are on a listen-only mode until we conduct a question and answer session following the presentation. As a reminder, today's call is being recorded. If you have any questions or comments during the presentation, you may press star 1 on your phone to enter the question queue at any time. I would now like to turn the conference over to Julie Stewart, Vice President of Investor Relations. Please go ahead.

Thank you, Matthew. Good morning, everyone, and thanks for joining us for our June quarter 2023 earnings call. Joining us from Atlanta today are CEO Ed Bastian, our President Glenn Hauenstein, our CFO Dan Jenke. Ed will open the call with an overview of Delta's performance and strategy. Glenn will provide an update on the revenue environment, and Dan will discuss costs in our balance sheets. After the prepared remarks, we'll take analyst questions. We please ask that you limit yourself to one question and a brief follow-up so we can get to as many of you as possible. And after the analyst Q&A, we will move to our media questions. 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, and all results exclude special items unless otherwise noted. You can find a reconciliation of our non-GAAP measures on the investor relations page at ir.delta.com. And with that, I'll turn the call over to Ed.

Thanks, Julie. Good morning, everyone. We appreciate you joining us. Today, thanks to the great work of our team, we announced record revenue and earnings, reflecting the strength of demand for and momentum of Delta's differentiated brand. During the June quarter, we generated earnings of $2.68 per share, a 90% increase over last year. This marks the highest quarterly earnings result in our history, an achievement that moves Delta beyond recovery and firmly on a great path forward. Revenue was 19% above last year and we achieved a 17% operating margin. This resulted in operating income of $2.5 billion, Robert Marlayson, bringing our operating profit over the last 12 months to $6 billion we generated over $1 billion of free cash during the quarter. Robert Marlayson, Bringing our first half free cash flow to $3 billion we continue to repay debt and we reinstated a quarterly dividend signifying strong execution on a three year plan and creating value for our owners. Robert Marlayson, At delta transportation is what we do, but experiences are what we deliver. and that's made possible by the exceptional service provided by the industry's best employees. The 90,000 Delta people continue to deliver for our customers during this busy summer season. Over the 4th of July weekend, our people delivered a great operation, completing over 21,000 flights with a 99.5% completion factor and industry-leading on-time performance. The Delta people continue to be recognized. During the quarter, the points guy ranked Delta as the best US airline for the fifth year in a row, with consistently high scores for reliability, customer experience, network, and loyalty. Sharing our success with our team is core to Delta's culture, and we continue to maintain a position of industry leadership on pay. During the quarter, eligible employees received a 5% pay increase on the 1st of April, and here today, we have accrued over $660 million in profit sharing, In fact, more than the total profit sharing paid out for full year 2022. We expect our profit sharing payout next February will continue to lead the industry by a wide margin. We will always be guided by our values of putting our people and our customers first. They are the driving force of our success. I want to thank our entire team for all they do for Delta and our customers. As I've recently noted, the industry backdrop remains constructive. Their travel demand is strong and the consumer is in good financial shape, particularly the premium consumer base that we target. After years of spending on goods, consumers want to travel. It's their number one big ticket purchase priority and they desire premium experiences. No one provides this better than Delta. At the same time, aviation infrastructure is still fragile and the industry continues to face multiple constraints across the supply chain. aircraft delivery delays and training needs. As a result, we see a significant gap between the supply that is in place and what demand could sustain, and we expect this gap will remain for an extended period of time. Turning to our outlook with our first half performance and visibility into the back half of the year, we are raising our full year outlook and now expect earnings of $6 to $7 per share. For the September quarter, demand momentum continues. We expect to deliver double-digit revenue growth of mid-teens operating margin and earnings of $2.20 to $2.50 per share. Glenn and Dan will provide more details on the components of our outlook. As we move to 2024 and beyond, our path forward is clear. The strategy that we shared at our investor day just a few weeks ago positions Delta incredibly well for the future. Our long-term priorities are to run the world's best airline, unlock the power of our brand, transform through digital, and deliver long-term shareholder value. Our strategy is underpinned by a commitment to financial performance with a focus on free cash flow, return on invested capital, and earnings durability. We are currently executing ahead of our three-year financial plan and are well positioned to achieve our 2024 earnings target of over $7 per share. On free cash flow, we introduced a new goal to generate over $10 billion of free cash flow from 2023 to 2025. Strong cash generation will enable us to return our balance sheet to investment grade metrics while consistently reinvesting in the business. In closing, thanks to the outstanding work of our people, Delta continues to set itself apart. We have unique opportunities to grow earnings by leveraging our powerful brand extending our durable competitive advantages, and accelerating our digital transformation. One other point I'd like to add. While our team has been hard at work returning the level of excellence to the skies that our customers deserve, we have not let go of our commitments to our community. Our team was recently recognized as the number one corporate blood drive donor for the American Red Cross for the sixth consecutive year with record units of blood collected. To me, these types of achievements are as rewarding as the great financial and operational results that we are publishing today and what makes this company truly great. Thank you again. And with that, let me turn the call over to Glenn and Dan to go through the details of the quarter.