8-K

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

FORM 8-K

CURRENT REPORT
Pursuant to Section 13 OR 15(d) of the

Securities Exchange Act of 1934

Date of Report (Date of earliest event reported): May 8, 2013

DELTA AIR LINES, INC.

(Exact name of registrant as specified in its charter)

Delaware	001-05424	58-0218548
(State or other jurisdiction of incorporation)	(Commission File Number)	(IRS Employer Identification No.)

P.O. Box 20706, Atlanta, Georgia 30320-6001

(Address of principal executive offices)

Registrant’s telephone number, including area code: (404) 715-2600

Registrant’s Web site address: www.delta.com

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below):

£  Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

£  Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

£  Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

£  Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Item 7.01       Regulation FD Disclosure.

Delta Air Lines, Inc. (“Delta”) issued today a press release announcing its plan to return more than $1 billion to shareholders over the next three years. The press release is attached as Exhibit 99.1 to this Form 8-K.

Delta will also provide an update to investors.  Materials to be used in conjunction with the update are furnished as Exhibit 99.2 to this Form 8-K.

In accordance with general instruction B.2 of Form 8−K, the information in this report (including the exhibits) that is being furnished pursuant to Item 7.01 of Form 8−K shall not be deemed to be “filed” for the purposes of Section 18 of the Securities Exchange Act, as amended, or otherwise subject to liabilities of that section, nor shall they be deemed incorporated by reference in any filing under the Securities Act of 1933, as amended, except as expressly set forth in such filing. This report will not be deemed an admission as to the materiality of any information in the report that is required to be disclosed solely by Regulation FD.

Statements in this Form 8-K and the attached exhibits 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 availability of aircraft fuel; the impact of posting collateral in connection with our fuel hedge contracts; the impact of significant funding obligations with respect to defined benefit pension plans; the impact that our indebtedness may 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; interruptions or disruptions in service at one of our hub airports; our dependence on technology in our operations; disruptions or security breaches of our information technology infrastructure; the ability of our credit card processors to take significant holdbacks in certain circumstances; the possible effects of accidents involving our aircraft; the effects of weather, natural disasters and seasonality on our business; the effects of an extended disruption in services provided by third party regional carriers; failure or inability of insurance to cover a significant liability at the Trainer refinery; the impact of environmental regulation on the Trainer refinery; our ability to retain management and key employees; our ability to use net operating losses to offset future taxable income; competitive conditions in the airline industry; the effects of extensive government regulation on our business; the effects of terrorist attacks; the effects of the rapid spread of contagious illnesses; and the costs associated with insurance.

Additional information concerning risks and uncertainties that could cause differences between actual results and forward-looking statements is contained in Delta’s Securities and Exchange Commission filings, including its Annual Report on Form 10-K for the fiscal year ended December 31, 2012. Caution should be taken not to place undue reliance on Delta’s forward-looking statements, which represent Delta’s views only as of May 8, 2013, and which Delta has no current intention to update.

Item 9.01       Financial Statements and Exhibits.

(d)  Exhibits.

Exhibit 99.1	Press Release dated May 8, 2013 titled “Delta Announces Plan to Return More Than $1 Billion to Shareholders Over the Next Three Years”
Exhibit 99.2	Presentation

2

SIGNATURES

          Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

	DELTA AIR LINES, INC.
	By:  /s/ Paul A. Jacobson
Date:  May 8, 2013	Paul A. Jacobson Senior Vice President and Chief Financial Officer

3

EXHIBIT INDEX

Exhibit Number		Description
	Exhibit 99.1	Press Release dated May 8, 2013 titled “Delta Announces Plan to Return More Than $1 Billion to Shareholders Over the Next Three Years”
	Exhibit 99.2	Presentation

4

EX-99.1

Exhibit 99.1

CONTACT: Investor Relations
404-715-2170   Corporate Communications 404-715-2554, media@delta.com

Delta Announces Plan to Return More Than $1 Billion to Shareholders Over Next Three Years

Board of Directors initiates $0.06 per share quarterly dividend, authorizes $500 million share repurchase

Balanced capital deployment creates up to $5 billion of value for shareholders through further debt reduction, return of cash to shareholders, and management of pension liability

ATLANTA, May 8, 2013 – In a broad financial plan released today, Delta Air Lines (NYSE:DAL) announced a balanced capital deployment program aimed at creating up to $5 billion of value for shareholders, including returning more than $1 billion to shareholders over the next three years.

As part of this program, Delta’s Board of Directors has initiated a quarterly dividend and declared a $0.06 per share dividend for shareholders of record as of Aug. 9, 2013. This dividend will be paid on Sept. 10, 2013. In addition, the Board has authorized a $500 million share repurchase program, to be completed no later than June 30, 2016. Together, these two programs are designed to return more than $1 billion of capital to shareholders over the next three years.

“Delta’s financial performance and balance sheet have strengthened considerably over the past five years and the Board believes the company is now in a position to begin returning cash to our shareholders,” said Daniel Carp, chairman of Delta’s Board of Directors. “The Board’s shareholder return program makes a long-term commitment to our shareholders with the implementation of an ongoing quarterly dividend, while also providing flexibility to return additional cash to shareholders through the share repurchase program.”

Comprehensive Financial Plan

Since 2009, Delta has made significant investments in its people, product and service, while improving its earnings and generating $4 billion of free cash flow. That free cash flow has been dedicated to strengthening the company’s balance sheet. As a result, Delta’s adjusted net debt has fallen from $17 billion at the end of 2009 to just under $12 billion at the end of 2012. The company expects to achieve its $10 billion adjusted net debt target by the end of 2013.

1

“Delta’s strategy has resulted in a solid financial foundation for our company, tremendous improvements in our fleet, facilities, products and technology, as well as top-notch operational reliability and service to our customers,” said Richard Anderson, Delta’s chief executive officer. “The capital deployment plan unveiled today furthers our commitment to becoming the airline of choice for our employees, customers and shareholders.”

In an investor presentation this morning, Delta outlined a comprehensive, five-year financial plan. The plan focuses on free cash flow generation through a combination of expected earnings improvements and a disciplined approach to capital investment. Over the next five years, the company plans to reinvest $2.0 - $2.5 billion annually, or approximately 50 percent of its operating cash flow, into improving the company’s fleet, facilities, products and technology. The resulting free cash flow will be used to return cash to shareholders, further reduce the company’s debt, and opportunistically address longer-term pension funding needs, driving up to $5 billion of value to Delta’s shareholders.

As part of this plan, Delta expects to achieve and maintain an adjusted net debt level of $7 billion, a $5 billion reduction over 2012. By meeting the $7 billion target, Delta will have reduced its adjusted net debt by $10 billion since 2009, significantly decreasing the company’s balance sheet risk and generating more than 50 percent savings in interest expense.

The company also plans to make up to $1 billion of incremental contributions to the company’s defined benefit pension plans over the next five years. These contributions would be in addition to the $650 - $700 million annual required minimum contribution.

More information on Delta’s comprehensive financial plan can be found as an exhibit to a Form 8-K the company filed with the Securities and Exchange Commission this morning.

Repurchases under Delta’s program may be made through a variety of methods, which may include open market purchases, privately negotiated transactions, block trades, or accelerated share repurchase transactions in compliance with applicable regulatory guidelines, including Securities and Exchange Commission Rule 10b-18. Purchases will be made subject to market and economic conditions, applicable legal requirements, and other relevant factors. Delta had approximately 855 million shares of common stock outstanding as of March 31, 2013.

About Delta

Delta Air Lines serves more than 160 million customers each year. Delta was named by Fortune magazine as the most admired airline worldwide in its 2013 World’s Most Admired Companies airline industry list, topping the list for the second time in three years. With an industry-leading global network, Delta and the Delta Connection carriers offer service to 317 destinations in 58 countries on six continents. Headquartered in Atlanta, Delta employs nearly 80,000 employees worldwide and operates a mainline fleet of more than 700 aircraft. The airline is a founding member of the SkyTeam global alliance and participates in the industry’s leading trans-Atlantic joint venture with Air France-KLM and Alitalia. Including its worldwide alliance partners, Delta offers customers more than 15,000 daily flights, with hubs in Amsterdam, Atlanta, Cincinnati, Detroit, Memphis, Minneapolis-St. Paul, New York-LaGuardia, New York-JFK, Paris-Charles de Gaulle, Salt Lake City and Tokyo-Narita. Delta is investing more than $3 billion in airport facilities and global products, services and technology to enhance the customer experience in the air and on the ground. Additional information is available on delta.com, Twitter @Delta, Google.com/+Delta and Facebook.com/delta.

2

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 availability of aircraft fuel; the impact of posting collateral in connection with our fuel hedge contracts; the impact of significant funding obligations with respect to defined benefit pension plans; the impact that our indebtedness may 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; interruptions or disruptions in service at one of our hub airports; our dependence on technology in our operations; disruptions or security breaches of our information technology infrastructure; the ability of our credit card processors to take significant holdbacks in certain circumstances; the possible effects of accidents involving our aircraft; the effects of weather, natural disasters and seasonality on our business; the effects of an extended disruption in services provided by third party regional carriers; failure or inability of insurance to cover a significant liability at the Trainer refinery; the impact of environmental regulation on the Trainer refinery; our ability to retain management and key employees; our ability to use net operating losses to offset future taxable income; competitive conditions in the airline industry; the effects of extensive government regulation on our business; the effects of terrorist attacks; the effects of the rapid spread of contagious illnesses; and the costs associated with insurance.

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 Annual Report on Form 10-K for the fiscal year ended Dec. 31, 2012.  Caution should be taken not to place undue reliance on our forward-looking statements, which represent our views only as of May 8, 2013, and which we have no current intention to update.

Non-GAAP Financial Measures

Delta sometimes uses information ("non-GAAP financial measures") that is derived from our 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 to the most directly comparable GAAP financial measures.

Delta is unable to reconcile certain forward-looking projections to GAAP as the nature or amount of special items cannot be estimated at this time.

Delta presents free cash flow because management believes this metric is helpful to investors to evaluate the company's ability to generate cash.

Delta uses adjusted total debt, including aircraft rent, in addition to long-term adjusted debt and capital leases, to present estimated financial obligations. Delta reduces adjusted total debt by cash, cash equivalents and short-term investments, resulting in adjusted net debt, to present the amount of additional assets needed to satisfy the debt.

Free Cash Flow
	Three Years Ended
(in billions)	December 31, 2012
Net cash provided by operating activities (GAAP)	$	8.1
Net cash used in investing activities (GAAP)		(5.5	)
Adjustments:
Proceeds from sale of property and investments and other		(0.8	)
Purchase of short-term investments		1.8
SkyMiles used pursuant to advance purchase under AMEX agreement		0.3
Total free cash flow	$	3.9

Adjusted Net Debt
	December 31,
(in billions)	2012					2009
Debt and capital lease obligations	$	12.7				$	17.2
Plus: unamortized discount, net from purchase accounting and fresh start reporting		0.5					1.1
Adjusted debt and capital lease obligations			$	13.2				$	18.3
Plus: 7x last twelve months' aircraft rent				1.9					3.4
Adjusted total debt				15.1					21.7
Less: cash, cash equivalents and short-term investments				(3.4	)				(4.7	)
Adjusted net debt			$	11.7				$	17.0

3

EX-99.2

Exhibit 99.2

Delta: A Balanced Approach to Capital Deployment May 8, 2013

This presentation contains various projections and other forward-looking statements which represent Delta’s estimates or expectations regarding future events. All forward-looking statements involve a number of assumptions, risks and uncertainties, many of which are beyond Delta’s control, that could cause the actual results to differ materially from the projected results. Factors which could cause such differences include, without limitation, business, economic, competitive, industry, regulatory, market and financial uncertainties and contingencies, as well as the “Risk Factors” discussed in Delta’s SEC filings. Caution should be taken not to place undue reliance on Delta’s forward-looking statements, which represent Delta’s views only as of the date of this presentation, and which Delta has no current intention to update. In this presentation, we will discuss certain non-GAAP financial measures. You can find the reconciliations of those measures to comparable GAAP measures on our website at delta.com. Safe Harbor 2

Balanced Approach To Capital Deployment Business Producing Strong Financial Results Disciplined Capital Investment Is Key To Success Balanced Approach To Capital Deployment 3 Delta’s financial foundation has strengthened considerably over the past five years with significant free cash flow used for balance sheet improvement; our five year plan shows growing cash flows and returns Taking a balanced approach to use of capital by allocating free cash flow among further debt reduction, shareholder returns, and opportunistically addressing longer-term pension funding obligations Maintaining disciplined approach to capital investment is key to sustained free cash flow generation and strong return on invested capital

A Path of Significant Improvement Delta’s financial foundation has strengthened considerably over the past five years, with a solid pipeline of initiatives in place for further improvement $1.4B $2.8B 2009 2012 1.5% 11.3% 2009 2012 $17.0B $11.7B 2009 2012 Operating Cash Flow Return on Invested Capital Adjusted Net Debt +$1.4B +9.8 pts -$5.3B 4 •Industry-leading profitability •Industry-leading revenue growth •Investments in high-quality products and service •Running a consistently reliable operation •Disciplined capital spending •Focus on high-return projects with short payback periods •Differentiated fleet strategy that combines used and new aircraft purchases •Over $400 million annual interest expense savings •Contributes to pre-tax margin expansion •On track to achieve $10 billion adjusted net debt this year

A Detailed Five-Year Planning Process With initial post-merger financial goals nearly achieved, the Board of Directors evaluated Delta’s comprehensive financial plan for the next five years •Long-term goal is to achieve sustainable, high single-digit pre-tax margins •Hold capacity growth below expected GDP change •Plan capacity levels conservatively to improve profitability in a rising fuel environment •Fleet flexibility is key to cost-effectively adjusting capacity •Consistent but disciplined capital investment in the business to increase Delta’s revenue premium and improve cost efficiency •Further debt reduction beyond $10 billion adjusted net debt Using Our Guiding Principles and Goals… …To Produce A Solid Five-Year Plan •Steady pre-tax margin expansion over the next five years •Tightened correlation between fuel and revenue driven by structural changes in the industry •Harvests the benefits from existing investments, such as New York, Virgin Atlantic, and Trainer. •Capital plan provides for ongoing investment in the business, while also preserving flexibility •Achieves and maintains new $7 billion adjusted net debt target •Non-fuel unit cost growth maintained at or below forward inflation estimates •Unfunded pension liability steadily declines over the entire period assuming no change to funding levels or financial market conditions 5

Disciplined Capital Investment Is Key To Success 6 Capital plan provides for ongoing investment in the business, while maintaining flexibility to adjust annual spending levels 2013 2014 2015 2016 2017 Capital Spending of $2.0 -$2.5 Billion Annually Not committed Facilities, Technology and Product Aircraft –committed

Capital Discipline Drives Free Cash Flow Capital Spending and Operating Cash Flow ($ Billion) Note: Includes pre-merger NWA Delta’s business model produces both solid financial results and significant free cash flow 1998 –2000 Cumulative earnings: $6.5 billion Cumulative free cash flow: ($2.0 billion) 2010 –2012 Cumulative earnings: $4.1 billion Cumulative free cash flow: $3.9 billion 7 $2.6 $3.8 $4.1 $4.8 $4.1 $2.9 $1.8 $1.3 $1.2 $0.9 $2.1 $2.6 $1.2 $1.3 $1.3 $2.0 $2.4 ($2.0) ($1.0) $0.0 $1.0 $2.0 $3.0 $4.0 $5.0 $6.0 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 Capex Operating Cash Flow $2.0-$2.5

Plan For Free Cash Flow Deployment Delta’s plan expected to generate significant free cash flow, creating up to $5 billion of value for shareholders through a combination of further debt reduction, capital return to shareholders and opportunistic pension funding 8 Debt Reduction Return to Shareholders Pension Funding Further $5 billion debt reduction from 2012 levels allows company to achieve and maintain new adjusted net debt target of $7 billion Board has approved a plan that will return more than $1 billion to shareholders over the next three years At current funding levels, pension liability to decline over next decade to below $5 billion; opportunistic incremental contributions of up to $1 billion mitigate longer-term funding needs

Debt Reduction Remains A Priority •There is meaningful benefit to further debt reduction; new target is to achieve and maintain $7 billion of adjusted net debt •Additional debt reduction drives improvements to earnings and cash flow, while strengthening the balance sheet $17.0 $15.0 $12.9 $11.7 $10.0 $7.0 2009 2010 2011 2012 2013E Goal Adjusted Net Debt 9 Further deleveringcreates value by: •Reducing Delta’s cost of capital, lowering funding costs •Improving earnings through lower interest expense •Increasing stability through a healthier balance sheet •Providing more consistent access to the capital markets by reducing leverage and improving Delta’s credit metrics Interest expense $1.3B $0.5B $1.0B$1.1B $1.2B $0.9B

2012 2017 Targeting Improved Balance Sheet Metrics •Plan targets investment grade balance sheet metrics; these metrics became the basis for company’s new $7 billion adjusted net debt target •By deriskingthe business, Delta improves its investment profile for long-term investors 2012 2017 2012 2017 FFO/Debt EBITDA/Fixed Charges Debt/EBITDA 10 All metrics exclude unfunded pension liabilities; FFO is cash flow from operations, before changes in working capital, plus adjustments for depreciation associated with operating lease conversion to debt; EBITDA is earnings before interest, taxes, depreciation and amortization; Fixed charges include operating lease interest. Benchmarks Based on Three Year US Industrial Average Medians as of fiscal year end 2011, sourced from www.mycreditprofile.standardandpoors.com. 15.3% 35 -40% 2.8x 5.0 –5.5x 4.6x 2.5 –3.0x S&P Industrial Average Median BBB 34% BB 25% B 12% S&P Industrial Average Median BBB 8.2x BB 4.8x B 2.3x S&P Industrial Average Median BBB 2.3x BB 3.2x B 5.5x

Pension Liability Will Decline Over Time • Delta’s benefit pension plans are permanently frozen and closed to new participants. No additional benefits are accruing to existing plan participants. • Airline relief within the 2006 Pension Protection Act provides for both a favorable discount rate and longer funding period. • Over the next decade, minimum pension contributions combined with expected 9% asset returns should generate sufficient cash flows each year to pay current benefits and also modestly increase the pension asset base. Pension Unfunded Liability and Benefit Payments ($B) 11 Pension liability declines to less than $5 billion over next decade at current interest rates assuming only minimum funding $- $2.0 $4.0 $6.0 $8.0 $10.0 $12.0 $14.0 2013 2015 2017 2019 2021 2023 Expected Benefit Payments Unfunded liability at current 4% discount rate Unfunded liability at historical 7% discount rate

$- $500 $1,000 $1,500 $2,000 2014 2016 2018 2020 2022 2024 2026 2028 2030 Required funding 5-year plan average Average Pension Funding Levels Drop Beyond 2024 •Pension Protection Act relief smoothsfunding requirements through 2024 •Funding requirements beyond 2024 still average less than current $650M -$700M annual funding levels 12 Pension Funding ($M) PPA ERISA 5-yr plan avg. $680M 2024-31 average minimum funding: $520M Note: Assumes current 4% discount rate and 9% asset returns

$- $500 $1,000 2014 2016 2018 2020 2022 2024 2026 2028 2030 Required funding with addl. contributions 5-year plan average Incremental Pension Contributions Can Address Longer-Term Pension Funding •Incremental contributions of up to $1 billion over next five years would smooth remaining funding required from 2024-31 at current discount rates •Incremental contributions over next five years would produce funding levels significantly lower than current averages 13 Pension Funding ($M) PPA ERISA 5-yr plan avg. $680M 2024-31 average minimum funding: $225M Note: Assumes current 4% discount rate and 9% asset returns

$- $500 $1,000 2014 2016 2018 2020 2022 2024 2026 2028 2030 Required funding with addl. contributions 5-year plan average Incremental Pension Contributions Can Address Longer-Term Pension Funding •If discount rates rise to normal historical levels of 7% and incremental contributions are made, funding requirements beyond 2024 are minimal 14 Pension Funding ($M) PPA ERISA 5-yr plan avg. $680M 2024-31 average minimum funding: $25M Note: Assumes Towers Watson historical Bond-Link discount rate 7% and 9% asset returns

Implementing A Program To Return Cash To Shareholders • Delta’s Board has approved a program aimed at returning more than $1 billion over the next three years to shareholders through regular dividends and share repurchases • Demonstrates strong commitment to shareholders, while preserving flexibility to adapt to changing conditions Regular Dividend $200 million per year Share Repurchase Authorization $500 million over three years •Making a long-term commitment to returning cash to shareholders -Sets a minimum annual amount to be returned •Implementing a $0.06 per share quarterly dividend beginning in the September 2013 quarter -First dividend has been declared for shareholders of record on August 9, to be paid on September 10 -At Monday’s closing price, this represents a 1.35% dividend yield •Share repurchase program provides flexibility to adapt to seasonal cash flows and changing economic conditions -Board has ability to approve subsequent authorizations for additional shareholder returns •$500 million share repurchase has been authorized -Repurchases to be completed no later than June 30, 2016 15

Balanced Approach To Capital Deployment Business Producing Strong Financial Results Disciplined Capital Investment Is Key To Success Balanced Approach To Capital Deployment 16 Delta’s financial foundation has strengthened considerably over the past five years with significant free cash flow used for balance sheet improvement; our five year plan shows growing cash flows and returns Taking a balanced approach to use of capital by allocating free cash flow among further debt reduction, shareholder returns, and opportunistically addressing longer-term pension funding obligations Maintaining disciplined approach to capital investment is key to sustained free cash flow generation and strong return on invested capital

 

Non-GAAP Financial Measures

Delta sometimes uses information ("non-GAAP financial measures") that is derived from our 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 to the most directly comparable GAAP financial measures.

Delta is unable to reconcile certain forward-looking projections to GAAP as the nature or amount of special items cannot be estimated at this time.

Delta excludes special items because management believes the exclusion of these items is helpful to investors to evaluate the company’s recurring core operational performance in the period shown.

Delta adjusts for mark-to-market (MTM) adjustments for fuel hedges recorded in periods other than the settlement period in order to evaluate the company's financial results in the period shown.

Delta uses adjusted total debt, including aircraft rent, in addition to long-term adjusted debt and capital leases, to present estimated financial obligations. Delta reduces adjusted total debt by cash, cash equivalents and short-term investments, resulting in adjusted net debt, to present the amount of additional assets needed to satisfy the debt.

Delta presents net cash provided by operating activities because management believes adjusting for certain items is helpful to investors to evaluate the company’s operating activities.

Delta presents combined capital spending because management believes adjusting for certain items is helpful to investors to evaluate the company’s investing activities.

Delta presents return on invested capital as management believes it is helpful to investors in assessing the company’s ability to generate returns using its invested capital.

Delta presents free cash flow because management believes this metric is helpful to investors to evaluate the company's ability to generate cash.

Delta presents Financial Metrics because management believes these metrics are helpful to investors to evaluate the company's financial performance.

17

 

Operating Cash Flow
	Full Year		Full Year
(in billions)	2012		2008
Delta operating cash flow (GAAP)	$	2.5	$	(1.7	)
SkyMiles used pursuant to advance purchase under AMEX agreement		0.3		–
Northwest operating cash flow		–		0.2
Net cash provided by operations, adjusted	$	2.8	$	(1.5	)

Return on Invested Capital
	Full Year		Full Year
(in billions, except % return)	2012		2009
Adjusted Book Value of Equity	$	13.9	$	12.9
Average Adjusted Net Debt	$	12.0	$	16.8
Average Invested Capital	$	25.9	$	29.7
Adjusted Total Operating Income	$	2.9	$	0.5
Return on Invested Capital		11.3%		1.5%

Adjusted Net Debt
	December 31,
(in billions)	2012					2011					2010					2009
Debt and capital lease obligations	$	12.7				$	13.8				$	15.3				$	17.2
Plus: unamortized discount, net from purchase accounting and fresh start reporting		0.5					0.6					0.61					1.1
Adjusted debt and capital lease obligations			$	13.2				$	14.4				$	15.9				$	18.3
Plus: 7x last twelve months' aircraft rent				1.9					2.1					2.7					3.4
Adjusted total debt				15.1					16.5					18.6					21.7
Less: cash, cash equivalents and short-term investments				(3.4	)				(3.6	)				(3.6	)				(4.7	)
Adjusted net debt			$	11.7				$	12.9				$	15.0				$	17.0

Capital Spending
	Full Year
(in billions)	2008
Delta capital expenditures (GAAP)	$	1.5
Northwest capital expenditures		1.1
Total combined capital spending	$	2.6

18

 

Pre-Tax Income
	Three Years Ended
(in billions)	December 31, 2012
Pre-tax income	$	2.4
Items excluded:
Restructuring and other items		1.1
Loss on extinguishment of debt		0.6
Pre-tax income excluding special items	$	4.1

Free Cash Flow
	Three Years Ended
(in billions)	December 31, 2012
Net cash provided by operating activities (GAAP)	$	8.1
Net cash used in investing activities (GAAP)		(5.5	)
Adjustments:
Proceeds from sale of property and investments and other		(0.8	)
Purchase of short-term investments		1.8
SkyMiles used pursuant to advance purchase under AMEX agreement		0.3
Total free cash flow	$	3.9

Financial Metrics
	Full Year				Full Year
(in billions)	2012			(in billions)	2012
Net cash provided by operating activities (GAAP)	$	2.5		Interest expense, net	$	0.8
Imputed operating lease depreciation and other		1.0		Amortization of debt discount, net		0.2
Adjusted funds from operations	$	3.5		Imputed operating lease interest		0.8
Adjusted interest expense					$	1.8
	Full Year				December 31,
(in billions)	2012			(in billions)	2012
Operating income	$	2.2		Total debt and capital lease obligations	$	12.7
Depreciation and amortization		1.5		Plus: Imputed amortized operating leases		9.9
Imputed operating lease    interest		0.8		Adjusted debt, including imputed    amortized operating leases	$	22.6
Restructuring and other items		0.4
EBITDA, adjusted	$	4.9
FFO/Debt		15.3	%
EBITDA/Fixed Charges		2.8
Debt/EBITDA		4.6

19