Our financial and operating results this quarter confirmed that success. It is really important that

Good morning, ladies and gentlemen, and welcome to the Delta Airlines 2013 First Quarter Financial Results Conference Call. My name is Jay, and I will be your coordinator. [Operator Instructions] As a reminder, today's call is being recorded.
Thanks, Jay. Good morning, everyone, and thanks for joining us on our March quarter call. Here in Atlanta today are Richard Anderson, Delta's CEO; our President, Ed Bastian; and our Chief Financial Officer, Paul Jacobson. We also have the entire leadership team here in the room for the Q&A session. Richard will open the call, Ed will then address broadway theatre tickets discounts our financial and revenue performance broadway theatre tickets discounts and Paul will conclude with a review of cost performance and cash flow. [Operator Instructions]
Today's discussion contains forward-looking statements broadway theatre tickets discounts that represent our beliefs or expectations about future events. All forward-looking statements involve risks and uncertainties broadway theatre tickets discounts that could cause the actual broadway theatre tickets discounts results to differ broadway theatre tickets discounts materially from the forward-looking statements. broadway theatre tickets discounts Some of the factors that may cause such differences are described in Delta's SEC filings. We'll also discuss non-GAAP broadway theatre tickets discounts financial measures today. All results broadway theatre tickets discounts exclude special broadway theatre tickets discounts items unless otherwise noted, and you can find a reconciliation of our non-GAAP measures on the Investor Relations page at delta.com.
Thanks, Jill. Good morning, and thank you, all, for joining us. We are pleased this morning to report a March quarter profit of $85 million. This is Delta's first March quarter profit since 2000 and tangible proof that we are successfully changing the global airline business model at Delta.
Our earnings increased by $124 million over last year, and we had 1.4 points of margin expansion. We earned $0.10 per share, beating consensus of $0.06 per share. broadway theatre tickets discounts Our operational performance and customer service are outstanding. We know how important a first-rate operation is to our customers, and Delta runs the best all-around customer service operation in the global industry by a wide margin. We have been doing so for 2 years, and we will continue to do so because it is an important strategic advantage.
We ran a domestic on-time arrival rate of 86.2%, showed a 2% improvement in DOT baggage performance, a 99% completion factor with a lot of tough weather broadway theatre tickets discounts and reduced DOT customer complaints by 12%. In fact, February had the lowest number of DOT complaints in Delta's history going back to 1997 when the DOT first started collecting the data. I'd like to thank the Delta people worldwide for all their work that went into achieving this great performance.
Our results broadway theatre tickets discounts include $20 million in profit sharing expense for the quarter, and this marks the first time we have ever accrued profit sharing in the March quarter. We have consistently articulated our financial and operating strategy to our shareholders. It is important to note that Delta has also delivered year in, year out on our strategic commitments to make Delta the airline of choice for our shareholders.
broadway theatre tickets discounts Our financial and operating results this quarter confirmed that success. It is really important that as we look forward, you understand that Delta has significant broadway theatre tickets discounts and important opportunities ahead to continue producing expanding margins and growing cash flows. We have a great franchise and a great brand at Delta. Delta has a full plate of new initiatives and opportunities ahead to continue widening our competitive advantage and operating margins, whether it's through running the most reliable long-time broadway theatre tickets discounts operation with the best employees in the industry, delivering top-notch customer service, building our presence in New York with a profitable LaGuardia expansion, the Virgin Atlantic investment or our new JFK Terminal 4 which will open on May 24.
You should broadway theatre tickets discounts expect that we will continue gaining operating strength broadway theatre tickets discounts as we further improve the customer experience, go through a massive broadway theatre tickets discounts up-gauge of our domestic fleet, deploy a variety of new technologies and operate our Pacific franchise with full lie-flat seats in business class this summer.
Now let's move to the specifics of the quarter and our outlook. Looking ahead, I know the top-of-mind issue for many of you is the demand environment. After a strong January and February, we did see a drop in close-end bookings, as well as some softness in leisure demand midway broadway theatre tickets discounts through March. We approached the quarter with a yield bias at Delta, broadway theatre tickets discounts which, coupled with sequester tax increases and other global economic factors, affected demand. Against this backdrop, we currently expect unit revenues in the second quarter to be flat to down slightly, on system capacity, which will be flat to up 1%.
To address any capacity issues -- to address these issues in the short term, we have recalibrated our revenue management approach and are reviewing off peak capacity levels by day of week in our summer schedule. As you know, from our history, Delta is quick to manage capacity. We'll continue to watch the revenue environment as we move through the summer, and we are prepared to make necessary changes to our fall capacity levels in response to market conditions.
broadway theatre tickets discounts But it is quite important to point out that the dynamic between fuel and revenue has shifted over the past few years with capacity as the fulcrum. As the industry has consolidated, broadway theatre tickets discounts we have experienced a much tighter correlation between revenue and fuel. For the past few years, this has manifested itself broadway theatre tickets discounts in strong revenue growth to cover rising fuel costs. This is an important correlation to our investors and is a significant change in the industry fundamentals. The same economic factors which cause passenger revenue softness also pushed down oil prices. The recent drop in Brent crude from $113 to $99 per barrel represents roughly a $1.3 billion annual broadway theatre tickets discounts cost reduction broadway theatre tickets discounts for Delta. We anticipate the lower fuel costs, broadway theatre tickets discounts combined broadway theatre tickets discounts with prudent capacity management, will more than offset any revenue softness. At Delta, we are focused on margin expansion.
Turning to the specifics. Our unit revenues in 1Q grew 4% on a 2.5% decrease in capacity. The investments we've made in operations, product and service, combined with our capacity discipline, have built a strong permanent revenue-producing foundation for Delta with the eighth consecutive quarter of a year-on-year broadway theatre tickets discounts revenue premium versus the industry's. On the cost side, we faced some pressures in the quarter which resulted in a 5% increase in our nonfuel unit cost, but this is substantially below our earlier guidance of a projected 6% to 8% increase. The significant improvement is the result of our structural cost initiatives taking hold as our operations and finance teams worked quite successfully to limit nonfuel unit cost growth in the quarter. broadway theatre tickets discounts With the domestic re-fleeting accelerating in the fall and other structural initiatives continuing to gain traction, we expect our nonfuel CASM growth to be 1% to 3% for the back half of the year.
On the balance sheet, we ended the quarter just under $11 billion; in adjusted net debt, a $6 billion reduction broadway theatre tickets discounts in 3 years, and we will hit our adjusted net debt target of $10 billion later this year. These debt reduction efforts lowered interest broadway theatre tickets discounts expense for the quarter by $50 million. We generated $1.1 billion of operating cash flow in the quarter. With our growing cash flow and earnings, coupled with an improved balance sheet, broadway theatre tickets discounts we are preparing to move into the next phase of our capital deployment strategy. Our Board of Directors is guiding our long-term capital deployment strategy, and we expect to make an announcement in the month of May on our overall capital deployment strategy going forward in how we will return cash to shareholders. Please stay tuned.
We have a solid financial foundation, and combined with the momentum broadway theatre tickets discounts we've built from our initiatives and the favorable broadway theatre tickets discounts fuel and revenue dynamic, we are well positioned to generate improved earnings and margins for the June quarter, where we expect an operating margin of 9% to 11%. Given the strong March quarter actual performance and our June quarter operating margin forecast, we expect strong year-over-year profitability improvement for Delta in the full year of 2013.
Thanks, Richard. Good morning, broadway theatre tickets discounts everyone. Thanks for joining us. Earlier today, we announced a March quarter profit of $85 million, which was a $124 million improvement broadway theatre tickets discounts over the prior year, excluding special items. Our earnings-per-share of $0.10 is $0.04 per share better than consensus and represents our first March quarter profit in over a decade.
During the quarter, we had a net $78 million charge from special items, broadway theatre tickets discounts which included $24 million of mark-to-market broadway theatre tickets discounts gains in fuel hedges, offset by $102 million in facilities, fleet and other charges. I'd also like to thank the entire Delta team for their contributions towards generating broadway theatre tickets discounts a profitable March quarter, which was an important milepost in the improvements we're making to our business model. It's their dedication to this company and to our customers that makes these results possible.
Turning to the revenue line. During the March quarter, our topline revenues grew $87 million, a 1 point increase despite 2.5% decrease in capacity. We had strong demand in January and February with unit revenue growth above 5%. However, in mid-March, we did see a drop in close-end bookings, coupled with some softness in leisure demand. A number of factors are weighing on the economy to produce this result, not only the sequester, but also the increased payroll tax and continued economic sluggishness in some of our major markets. And because of the strong demand that we had seen at the start of the year, our revenue management systems were biased towards pushing for yield, which exacerbated this impact.
Now while the month did not play out as we had anticipated, we moved quickly to address the changing demand environment, and the impacts from our yield strategy should be largely isolated in March and April. We will keep a watchful eye on the revenue environment broadway theatre tickets discounts and capacity levels, but I