Delta Air Lines, Inc.

If you have any questions or comments during the presentation, you may press star one 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 December quarter and full year 2024 earnings call. Joining us from Atlanta today are our CEO Ed Bastian, our President Glenn Hauenstein, and 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 and our balance sheet. After the prepared remarks, we'll take analyst questions. We ask you please 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'll move to our media questions. As a reminder, 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-GAP financial measures, and all results exclude special items unless otherwise noted. You can find a reconciliation of our non-GAP measures on the Invest Relations page at IR.Delta.com. And with that, I'll turn the call over to Ed.

Well, thank you, Julie. And good morning. We appreciate everyone joining us today. Before we start, the hearts of the entire Delta family go out to all those who are being impacted by the devastating wildfires in Southern California. We're incredibly grateful to the heroic first responders who are working at great personal risk to keep our community safe. We announced yesterday that Delta will donate $1 million to the American Red Cross to aid the individuals, families, and communities in the region who have been affected. I also wanted to say a few words on the recent passing of President Carter. As a Georgia-based airline, his life and legacy has had a deep impact on Delta's mission to connect the world. Among his many accomplishments, his administration led the deregulation of our industry, making air travel more accessible and affordable to all Americans. I had the privilege of knowing President Carter and traveled with him on multiple occasions. He always took the time to personally greet our staff and every single customer on each flight we were on. He was as gracious and genuine a leader as I've ever met, a truly great man. His life of service embodied our motto to always keep climbing. And on behalf of the entire Delta family, we honor his memory and celebrate the many achievements of President Carter's life. Earlier this morning, we reported December quarter and full year results. The Delta team delivered a strong close to the year, both operationally and financially. We reported a December quarter pre-tax profit of $1.6 billion with earnings per share of $1.85 at the top end of our guidance on record revenue and outstanding operational performance. This marks the largest December quarter profit in Delta's history, improving more than $500 million over last year. Operationally, we achieved industry-leading performance with a number one system completion factor and on-time performance amongst our peer set throughout the December quarter. I want to thank all 100,000 members of our team for their outstanding efforts, particularly during a busy holiday travel season. For the full year 24, our operational teams delivered 78 brand-perfect days. Last week, Delta was recognized for the fourth consecutive year with Siriam's Platinum Award. for operational excellence and as the most on-time airline in North America. Financially, we expect our results will lead the industry across all key measures with a double-digit operating margin and 5.2 billion of pre-tax income representing nearly 50% of the industry's profitability. Our return on invested capital of 13% is in the upper half of the S&P 500 and double the rest of the industry. This performance reflects Delta's sustained differentiation and durability. Full year earnings per share of $6.16 was above the midpoint of our initial $6 to $7 guidance from the start of the year when normalizing for the $0.45 impact of the CrowdStrike-caused outage in the September quarter. Free cash flow is expected to lead the industry at $3.4 billion, a nearly $1.5 billion improvement over 23. robust cash generation supported further debt reduction and a 50% increase to our quarterly dividend during the year. Recognizing the strength of our financial foundation, S&P upgraded Delta last month, returning our balance sheet to investment grade level at all three major credit agencies. Now, these results would not be possible without the incredible work of the Delta people. Our employees are the best in the business, and we are proud to recognize their commitment to industry-leading performance with industry-leading rewards. In 2024, we provided our employees with a 5% pay increase. And I'm pleased to announce that we will celebrate them with $1.4 billion in well-earned profit sharing on Valentine's Day in February. This will represent one of the top three profit sharing payouts in Delta's history and is expected to be more than the rest of the industry combined. The Delta people are our number one competitive advantage. And our 2024 performance reflects their commitment to best in class operations and service for our customers. Now turning to our outlook, 25 is off to a great start, and we are on track to deliver the best financial year in our history with revenue growth and margin expansion driving record profitability. Across the industry, carriers are taking action to improve their financial health, creating increasingly constructive backdrops. The U.S. consumer is financially healthy and continues to prioritize spending on experiences. Closing out 2024, we saw an acceleration in air travel demand from corporates and consumers, and co-brand card spending growth accelerated. This momentum is continuing into the March quarter, where we expect to grow the top line by seven to nine percent, expand margins by two points, and nearly double earnings over last year. For the full year, we expect earnings per share greater than $7.35, increasing more than 20% compared to 2024, as reported. When comparing to a normalized EPS, excluding the impact of CrowdStrike, this represents growth ahead of our long-term target of 10% average annual growth. Cash generation is an important differentiator for Delta. And in 2025, we expect to generate over $4 billion of free cash flow supporting further debt reduction and bringing our leverage ratio down to two times or less. As we shared at Investor Day in November, Delta has a clear focused strategy that capitalizes on 15 years of investment in our brand, customer experience, and financial foundation. Entering our next century of light, Delta has never been more differentiated from the industry. As a consumer brand that serves 200 million customers annually, We leverage innovation and technology to empower our people and further elevate the travel experience. Tuesday night, I had the honor of giving the keynote address at CES 2025 in Las Vegas at Sphere. In that unique space, we honored Delta's century of connecting the world, presented our vision for the next century of flight, and previewed how Delta is driving innovation to deliver more seamless journeys from home to your seat, including new personalized experiences that are arriving in the coming months. This includes the introduction of Delta Concierge, the evolution of Delta Sync, and exciting new partnerships that will enable us to better anticipate customers' needs and grow the value of SkyMiles membership. Delta Concierge is a new digital tool built into the FlyDelta app, which will support members as a virtual personal assistant powered by generative AI to make travel easier and less stressful. The next phase of Delta Sync starting later this year includes a new and exclusive partnership with YouTube, the world's largest video platform to provide access to ad-free YouTube premium and music streaming on board via Delta Sync seatback screens and our fast free Wi-Fi for SkyMiles members. And we announced an exclusive new partnership with Uber where SkyMiles members will earn miles for eligible rides and deliveries in the U.S. This unique relationship creates new opportunities to integrate further and expands our partnerships with category leaders, broadening the Delta SkyMiles ecosystem and the range of benefits we provide to our members every day. Together, these products and partnerships reflect our continued commitment to investing in and providing our customers with a superior travel experience. They drive greater engagement with our SkyMiles members that extend well beyond air travel improving customer satisfaction, and deepening loyalty to Delta. In closing, Delta's people continue to differentiate what we deliver for our customers and our owners. With momentum entering our 100th year, we are positioned to deliver another year of industry-leading performance. And Al, I'll turn it over to Glenn.