Delta Air Lines (DAL) FY19 EPS Misses Estimates by 20c at Mid-Point

Leadership at Delta (NYSE: DAL) today will highlight its long-term business strategy and 2019 financial targets at the company's annual Investor Day.

"Delta is leading the way with our powerful brand and unmatched competitive advantages. In 2018, the Delta people have delivered another year of industry-leading financial results, sustained improvement in customer satisfaction and solid returns for our owners," said Ed Bastian, Delta's chief executive officer. "We have a bright future ahead and are confident in our plan for double-digit earnings growth in 2019 of $6 to $7 per share with both top-line growth and margin expansion."

The leadership team will discuss:

• How the company's powerful consumer brand, combined with Delta's unmatched competitive advantages – culture, operational reliability, global network, customer loyalty and an investment-grade balance sheet – create opportunities for sustained revenue and earnings growth.
• Expectations for 2019 profits above $5 billion for a fifth consecutive year, driven by revenue growth and margin expansion, with a 15 percent after-tax return on invested capital.
• Top-line growth in 2019 of 4 to 6 percent, driven by an increasingly diverse revenue stream, premium product mix, and a pipeline of initiatives.
• Non-fuel unit cost growth trajectory improving as efficiency initiatives gain momentum and Delta's fleet transformation continues.

"Delta has a great runway of opportunity as we continue to provide superior travel experiences and industry-leading reliability for our customers" said Glen Hauenstein, Delta's President. "Our pipeline of commercial initiatives and brand momentum drive our expectations for 4 to 6 percent revenue growth in 2019."

Delta will outline its financial framework and introduce financial targets for 2019, including:

• Diluted earnings per share of $6 to $7, with pre-tax margin expansion of approximately 100 basis points at midpoint
• Top-line growth of 4 to 6 percent on 3 percent capacity expansion
• Non-fuel unit cost growth of approximately one percent

(**Street sees FY19 EPS of $6.70)

"2018 has demonstrated Delta's resiliency as we've overcome 90 percent of a $2 billion headwind from fuel costs" said Paul Jacobson, Delta's Chief Financial Officer. "With a structurally improved business model that produces strong cash generation, we remain committed to continued reinvestment in our business, an investment-grade balance sheet and industry-leading shareholder returns."

The Investor Day event will feature presentations and Q&A sessions with:

• Ed Bastian, Chief Executive Officer
• Glen Hauenstein, President
• Gil West, Chief Operating Officer
• Tim Mapes, Chief Marketing Officer
• Eric Phillips, Senior Vice President – Revenue Management
• Rahul Samant, Chief Information Officer
• Joanne Smith, Chief Human Resources Officer
• Paul Jacobson, Chief Financial Officer

Delta invites shareholders, the investment community and the media to listen to a live webcast of this event today from 8:30 a.m. to 1 p.m. ET. A live webcast will be available at http://ir.delta.com/news-and-events/calendar/. An online replay will be available at the same site shortly after the webcast is complete.

Delta Air Lines serves more than 180 million customers each year. In 2018, Delta was named to Fortune's top 50 Most Admired Companies in addition to being named the most admired airline for the seventh time in eight years. Additionally, Delta has ranked No.1 in the Business Travel News Annual Airline survey for an unprecedented eight consecutive years. With an industry-leading global network, Delta and the Delta Connection carriers offer service to 302 destinations in 52 countries on six continents. Headquartered in Atlanta, Delta employs more than 80,000 employees worldwide and operates a mainline fleet of more than 800 aircraft. The airline is a founding member of the SkyTeam global alliance and participates in the industry's leading transatlantic joint venture with Air France-KLM and Alitalia as well as a joint venture with Virgin Atlantic. Including its worldwide alliance partners, Delta offers customers more than 15,000 daily flights, with key hubs and markets including Amsterdam, Atlanta, Boston, Detroit, Los Angeles, Mexico City, Minneapolis/St. Paul, New York-JFK and LaGuardia, London-Heathrow, Paris-Charles de Gaulle, Salt Lake City, São Paulo, Seattle, Seoul, and Tokyo-Narita. Delta has invested billions of dollars in airport facilities, global products and services, and technology to enhance the customer experience in the air and on the ground. Additional information is available on the Delta News Hub, as well as delta.com, Twitter @DeltaNewsHub and Facebook.com/delta.

Non-GAAP Financial Measures

The following tables show reconciliations of non-GAAP financial measures. The reasons Delta uses these measures are described below. Reconciliations may not calculate due to rounding.

Delta sometimes uses information ("non-GAAP financial measures") that is derived from the Consolidated Financial Statements, but that is not presented in accordance with accounting principles generally accepted in the U.S. ("GAAP"). Under the U.S. Securities and Exchange Commission rules, non-GAAP financial measures may be considered in addition to results prepared in accordance with GAAP, but should not be considered a substitute for or superior to GAAP results. The tables below show reconciliations of non-GAAP financial measures used in this presentation to the most directly comparable GAAP financial measures.

We do not reconcile certain forward looking non-GAAP financial measures because mark-to-market ("MTM") adjustments and settlements will not be known until the end of the period and could be significant.

Pre-Tax Income, Adjusted We adjust pre-tax income for the following items to determine pre-tax income, adjusted:

Mark-to-market ("MTM") adjustments and settlements. MTM adjustments are defined as fair value changes recorded in periods other than the settlement period. Such fair value changes are not necessarily indicative of the actual settlement value of the underlying hedge in the contract settlement period. Settlements represent cash received or paid on hedge contracts settled during the period.

Equity investment MTM adjustments. We record our proportionate share of earnings/loss from our equity investments in Virgin Atlantic and Aeroméxico in non-operating expense. We adjust for our equity method investees' MTM adjustments to allow investors to better understand and analyze our core operational performance in the periods shown.

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