Exhibit 99.2
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This investor update provides Delta’s guidance for the June quarter 20101,2.
Advance Revenue Trends
· | Projected system load factors for June and July 2010 of 87% are expected to be consistent with the prior year period. |
· | The company expects June quarter passenger RASM to increase approximately 20%, compared to the same period last year. |
· | Corporate contract volume was up 35% year over year and the associated revenue was up 63%, for the week ended May 23, 2010. |
Profit Sharing
· | Delta employees participate in a profit sharing program. The June quarter profit sharing expense is estimated at $85 million. |
Liquidity and Cash Flow
· | Delta expects to end the June 2010 quarter with $6.0 billion of unrestricted liquidity. |
· | In 2010, the company projects free cash flow of $700 million in the June quarter and $2 billion for the full year. |
Key Financial Metrics
June Quarter 2010 | ||
Operating margin (includes profit sharing expense) | 10 – 11% | |
EBITDAR | $1.4 billion | |
Consolidated fuel price, including taxes and hedges | $ 2.32 | |
Capital expenditures | $350 million | |
Cargo and other revenue | $1.2 billion | |
Non-operating expense3 | $350 million | |
June Quarter 2010 vs. June Quarter 2009 | ||
Consolidated CASM, excluding fuel and profit sharing expense | Up 1% | |
Mainline CASM, excluding fuel and profit sharing expense | Up 2% | |
System capacity | Flat | |
Domestic | Flat | |
International | Down 1% | |
Mainline capacity | Flat | |
Domestic | Up 2% | |
International | Down 1% |
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Fuel hedge update
As of 6/11/2010 | ||
% of Projected Fuel Requirements Hedged | ||
June Quarter 2010 | ||
Call options | 28% | |
Collars | 11% | |
Swaps | 12% | |
Total | 51% | |
Projected fuel price/gallon | $2.32 |
Projected fuel price includes:
· | Assumed $88.44 all-in price per barrel for crude oil plus refining spread |
· | Hedge gain of $0.04/gallon |
· | $0.25 for taxes, transportation and hedge premiums |
Share count
· | Delta expects approximately 842 million diluted weighted average shares, approximately 834 million basic weighted average shares outstanding for the June 2010 quarter. |
Notes
1 | Delta excludes special items because management believes the exclusion of these items is helpful to investors in evaluation of the company’s recurring operational performance. |
2 | Delta is unable to reconcile forward looking projections to GAAP as the nature or amount of special items cannot be estimated at this time. |
3 | The June quarter 2009 included a gain of $45 million related to SFAS 133. |
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 effects of the global recession; the effects of the global financial crisis; the impact of posting collateral in connection with our fuel h edge contracts; the impact that our indebtedness will have on our financial and operating activities and our ability to incur additional debt; the restrictions that financial covenants in our financing agreements will have on our financial and business operations; labor issues; the ability to realize the anticipated benefits of our merger with Northwest; the integration of the Delta and Northwest workforces; interruptions or disruptions in service at one of our hub airports; our increasing dependence on technology in our operations; our ability to retain management and key employees; the ability of our credit card processors to take significant holdbacks in certain circumstances; the effects of terrorist attacks; and competitive conditions in the airline industry.
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 Form 10-K for the year ended December 31, 2009 and Quarterly Report on form 10-Q for the quarterly period ended March 31, 2010. Caution should be taken not to place undue reliance on our forward-looking statements, which represent our views only as of June 15, 2010 and which we have no current intention to update.
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