I have sneaking suspicion. I hope I am wrong but Im thinking RA may be on his way out and wants to settle this before he leaves. If he is leaving, I hope it is not related to a health issue.:(

TEN

I have no idea what ALPA expected, but the language that was fine-tuned over several administrations certainly planned for it. Which contradicts your assertion that any "guys" simply "stumbled upon it". I think that was the point that started this exchange, and it's not valid.

I will agree that I didn't have an exact sense of how much it would pay, exactly, just that it would have to be big, because we gave so much.

We also were dealing with expensive fuel that looked to be going up endlessly, so much more than 20? Probably not.

Of course, I have no idea how long fuel will stay relatively suppressed.

From a press release dates 5/29/15:

Note the profit sharing stuff.


"We believe that reducing our impact on the environment is a business imperative," said John Laughter, Delta's Senior Vice President – Corporate Safety, Security and Compliance. "We remain committed to reporting on our performance and doing what we can to address climate change through ongoing fuel efficiency improvements."

Delta's 2014 Corporate Responsibility Report can be accessed online at delta.com/responsibility and features an introductory letter from Delta's CEO Richard Anderson.

Significant accomplishments in the 2014 report include:

Achieving carbon-neutral growth based on 2012 emission levels through the purchase of more than 1.7 million carbon offsets
Reducinghazardous waste generation system-wide by 14 percent
Expanding Delta's In-Flight Recycling program to 33 cities, which increased recycled material by 6.8 percent
Diverting 12,640 pounds of life vests, 65,000 pounds of carpet and 7,973 tons of leather seat covers through upcycling efforts
Continuing a tradition of support for a variety of charitable organizations both in the U.S. and internationally, including the American Cancer Society, the American Red Cross, the Breast Cancer Research Foundation, CARE, the Ghana Red Cross Society, Habitat for Humanity International, KaBOOM!, The Prince's Trust and the United Way
Exceeding minority and women-owned business enterprises and diverse supplier performance goals by 2.5 percent and 7 percent respectively
Reducing Delta's employee injury rate by 4 percent relative to 2013 levels
Rewarding the efforts of Delta employees with more than $1 billion in profit sharing and $84 million in bonuses for meeting operational goals
Delivering best-in-class operational performance withon-time arrivals at 84 percent and a completion factor of 99 percent, excluding the impact of storms
Reporting a $4.5 billion profit for the year, excluding special items, an all-time record for the airline industry
The 2014 report also highlights the airline's continued focus on the fuel efficiency of its aircraft and ground support equipment, providing commute options for employees and creating opportunities for customers to offset greenhouse gas emissions associated with their flights.

Additionally, Delta successfully verified its complete 2014 greenhouse gas emissions inventory under The Climate Registry and was again named to the Dow Jones Sustainability North American Index and has been since 2011.

Here's why I don't care about share price or EPS.

Delta Air Lines Director George N. Mattson Acquires 5,000 Shares (DAL) | Ticker Report

I can't afford $209,400 for 5000 shares @ $41.88/share.

Even with a return that beats the consensus $4.61 EPS (earnings per share) this year, say $5 EPS that's a return of $25,000. My profit sharing was more last year about $26,000ish and I didn't spend a dime.

Our profit sharing comes off the top as the earnings are booked each quarter, prior to the investor returns. This is why they want it back. This also creates a lower level of risk compared to the investor.

Further reducing the risk is an insiders willingness to purchase the stock. This requires public disclosure and legal requirements that have to be met.

And finally the best evidence our profit sharing is secure for the next 3 years is the $6 billion promise they made to investors through 2017. You can't make this kind of promise unless you have good visibility on earnings for the period. Their visibility is good but not great. The last shareholder return package was completed early meaning they underestimated and over delivered. That's the key to impressing analysts and driving stock price. It also gives them wiggle room just in case they are only good. They would still be able to deliver even if their cost estimates were off say $480m annually. If this is the baseline what's the upside?

Debunking "at risk" one insider purchase at a time. Look for more in the near future.

Completely agreed, Sink! The x-factor is the company perhaps (and I mean really perhaps since the leaks are very much only a possibility) not wanting to pay what they thought would never happen.

I think everyone on APC agrees that the company doesn't want to pay it when it works for us. Wall Street can't bear the thought that we're getting a SHARE of the profits. Not the profits: a share. File that under "total disregard for us". That's not in question. So yes, if it's good, they don't want to pay it.

There is also no question that HOW good it's going to be is speculative.

Carl was making the point that PS expectations are confirmed by the stock price. If so, charting the stick price over a few years would suggest PS has peaked, especially considering buybacks and dividends meant to prop it.

I think notEnuf is probably more correct in disregarding stock price in his approach.

Personally, I never would have expected or predicted profit sharing to be as successful as it has been. Airline profits historically haven't been anywhere near where they have been recently. When the profit sharing was included in the contract, honestly, for me it was a meh, whatever, thing.

I never mentally correlated profit sharing potential to what was taken from us. I, instead, looked at the company's financial restructuring as a negative...reinventing itself as a LCC with the attendant pay and benefits.

So, for me, potential profit sharing upside was not something I ever thought would be a BIG benefit.

As to stock price, I saw the upside. However, the upside was more tied to debt pay down and the company's listing on the S&P, among other factors. However, I did not see the same upside for either UAL or AA for the same reasons. I frankly thought due to listing on the S&P, we would significantly decouple from the airline/transportation indexes and be more tied to the S&P index...mostly because of the influence of ETFs in the trading marketplace (sector investing). This may sound contradictory, but I put us in the S&P sector and not in the transport sector. The truth, in retrospect is that we are still in both.

Bottom line though, PS was never something I thought would be so significant. Now that it is, the only thing I would consider trading any of it for would be for the company to fill up my 401k to the 415c limit...and that is only a portion of profit sharing, not all of it...maybe. Pay rates are a separate issue entirely.

As far as correlating PS to stock price, there certainly is some correlation. It isn't a direct correlation though. I haven't done a regression analysis on it and I don't think you have to, it is intuitive. However, there is some correlation.

Save that. It'll serve a purpose later if the at risk mantra shows up again, but hopefully the reps will make it a moo point.

"at risk" Debunk #2
 

"at risk" debunk #2

Here's my latest find. It took some digging and a little review of last years quarterly updates. This requires a compare and contrast of the two Q1 reports but is summarized best by Ed Bastian.

Here's the two reports.

2014 Q1
http://ir.delta.com/files/doc_financ...001_j55rj9.pdf

2015 Q1
http://ir.delta.com/files/doc_financ...001_k0ii9v.pdf


Both reports contain a discussion of Q2 revenue under the heading Revenue Environment.

The 2014 statement by Ed Bastian

“March quarter's top line growth of 5 percent shows the strength of Delta's revenue momentum even through the revenue loss from weather and a shift of the Easter holiday traffic into April,” said Ed Bastian, Delta’s president. "We see continued revenue strength as we move through the year from corporate revenue gains, the benefits of the Virgin Atlantic joint venture and improved ancillary revenues. These initiatives, coupled with a solid demand environment, should lead to unit revenue growth in the mid-single digits for the June quarter."


The 2015 statement by Ed Bastian

“For the March quarter, Delta delivered solid 5 percent top line growth and a 17.8 percent operating margin at market fuel prices,” said Ed Bastian, Delta’s president. “The substantial benefit from lower fuel prices will again more than offset the unit revenue decline of 2 to 4 percent for the June quarter to produce operating margins north of 20 percent at market fuel prices.”



2014 = mid single digit growth in revenue
2015 = 2-4% revenue decline

2014 = margin was 14.9%
2015 = margins north of 20% for June quarter


How can that be? Reduced revenue but increased margin? The only answer is costs. Fuel to be specific. We will hit it out of the park at market price fuel. Remember hedges were written down early so we have a market price fuel expense. That gives us a favorable peer to peer comparison on an even playing field. That will surely help the stock price. Focus on the margins though, that is what helps our profit sharing. We care about earnings not stock price or EPS.

June quarter profit sharing contributions will out pace last year.

The only risk to us collecting this is if we give it away.

We now have 2 quarters trending above 2014 with our historically best quarter of the year next Q3.

Haven't spent much time on this thread so I don't know if this has been mentioned or not. But I've noticed that some guys (including an LEC Chairman) do not understand the definition of profit.


Instead of using the real definition and treatment of what profit is, some would prefer to reclassify profit as a cost. It is not a cost.

To treat our profit sharing as a cost, (i.e. to accept that language) allows one to compare total pilot compensation at Delta to other carriers total pilot cost. Apples to oranges. Instead the discussion regarding pilot costs should include just that--the cost.

What's amazing is how easily the language is accepted by those who have a big influence on our current negotiations.