Delta Air Lines ends Q2 with $5.7 billion of liquidity, cuts debt by $7 billion in four years

By Lisa Kerner

Charlotte, N.C., July 24 - Delta Air Lines reported $1.3 billion of operating cash flow and $5.7 billion of liquidity at June 30, according to chief executive officer Richard Anderson.

"We are also seeing significant results of debt reduction, which delivered $40 million of interest savings this quarter alone," said Anderson during the company's second-quarter earnings conference call on Wednesday. "We ended June with $10.2 billion of adjusted net debt, and we will achieve our $10 billion net debt target by the end of the year."

Cash and short-term investments were $3.9 billion, and Delta had $1.8 billion in undrawn credit facilities at quarter-end.

The company has achieved a nearly $7 billion in net debt reduction since 2009, according to the earnings release.

"With our six cents dividend beginning in September and our $500 million purchase authorization, we expect to return $1 billion to shareholders [over a three-year period]," Anderson said.

The company reported a net profit of $844 million, or $0.98 per diluted share, excluding special items, for a record June quarter profit.

Free cash flow for the quarter was $730 million.

For the quarter, Delta's operating revenue was down $25 million. Debt maturities and capital leases were $405 million.

"Our strong free cash flow generation, along with the substantial improvements we have made to our balance sheet, allows us to implement our new capital deployment plan, which will return an initial $50 million to shareholders with our September quarter dividend," said Paul Jacobson, Delta's chief financial officer.

Delta is an Atlanta-based provider of scheduled air transportation for passengers and cargo.

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