Delta Air Lines, Inc. · NYSE:DAL
Delta Air Lines — Deutsche Bank Global Industrials and Materials Summit 2017
22 slides from Delta Air Lines's conference presentation, Jun 7, 2017
Slide 1: Delta: Delivering Sustainable Results
Delta: Delivering Sustainable Results Deutsche Bank Global Industrials and Materials Summit June 7, 2017
Slide 2: Safe Harbor
Safe Harbor Statements in this presentation 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
Slide 3: Delivering Sustainable Results
Delivering Sustainable Results Leveraging our solid foundation to produce consistent, sustainable results for shareholders Solid Track Record of • Running a reliable, customer-focused airline is producing strong Producing Consistent profits and cash flows that are sustainable through the business Re
Slide 4: Delta's Evolution Over the Last Decade
Delta’s Evolution Over the Last Decade Delta’s entire business has been transformed, creating a durable franchise for all stakeholders 2007 2008 2009 2010 2012 Merged with Northwest to Established JV Established Seattle and Delivered record pre-tax Completed successful create world’s largest with Ai
Slide 5: Consistently Producing Solid Results
Consistently Producing Solid Results Running a reliable, customer-focused airline is producing strong profits and cash flows, allowing for improved balance sheet strength and increased return of capital to shareholders Pre-Tax Profit Free Cash Flow Capital Returns to Shareholders $6.1B $3.7B $3.8B $
Slide 6: 2017 Is A Transition Year
2017 Is A Transition Year Capacity discipline supports improving unit revenue trends, which will allow Delta to invest in our people and product and offset pressures from rising jet fuel prices • System capacity growth capped at 1% for 2017 – appropriate level to balance capital investment and suppl
Slide 7: June Quarter Marks Return to Margin Expansion
June Quarter Marks Return to Margin Expansion Better unit revenue, lower fuel combine to produce margins in upper half of 17% - 19% guidance range • Unit revenues are tracking at the upper-end of the original guidance of up 1% - 3% driven by improving Delta Unit Revenue Year-on-Year business yields
Slide 8: Leveraging Solid Foundation to Drive Further Improvement
Leveraging Solid Foundation to Drive Further Improvement Well positioned to achieve long-term targets given an improving revenue outlook, strong cost discipline, and a balanced capital allocation strategy 2018 – 2020 Framework • Well positioned to achieve 2018-2020 targets Operating 16 – 18% – Comme
Slide 9: Room for Further Top-Line Growth
Room for Further Top-Line Growth Solid pipeline of initiatives to drive sustainable revenue premium • Premium products – Delta One, Premium Select, Delta Comfort+ – offer Better value-adds for customers Customer • Basic Economy domestic rollout complete, international rollout in progress Segmentatio
Slide 10: Efficiency Focus Drives Revenue Improvement to Bottom-Line
Efficiency Focus Drives Revenue Improvement to Bottom-Line Delta remains committed to delivering non-fuel cost growth of 2% or less over the long-term Annual Non-Fuel CASM Growth • 2013-2016 average non-fuel unit cost growth of 2.8% includes 70 bps of pressure from profit sharing 2.8% ~2-3% 0.7% ~2%
Slide 11: Strong Cash Generation Differentiates Delta
Strong Cash Generation Differentiates Delta Strong cash generation funds investments in the future, balance sheet de-risking and capital returns to owners • Capex planned at ~50% of operating cash flow 2010-2016 Capital Expenditures and – Allows for replacement of ~25% of Delta’s mainline Operating
Slide 12: Continuing to Strengthen the Balance Sheet
Continuing to Strengthen the Balance Sheet Investment grade balance sheet provides Delta with business flexibility and reduced financial risk • Remain committed to $4B adjusted net debt target – Maturity profile for next few years allows Delta to reach target without having to retire debt early Tota
Slide 13: Commitment To Consistent Shareholder Returns
Commitment To Consistent Shareholder Returns Focused on increasing cash returned through dividends, providing more consistent cash returns for owners Annual Dividend $875M • Announced 4th consecutive 50% increase to the $600M dividend since initiated in 2013 on May 11 $425M $300M $1.22 – Annual divi
Slide 14: Delta: Delivering Sustainable Results
Delta: Delivering Sustainable Results America’s Best Run Airline Leading Partnerships Throughout the World Setting the standard for financial, operational and Sustainable Margins, Returns, service excellence in the and Cash Flows airline industry Investment Grade Balance Sheet Provides Solid Foundat
Slide 15: Keep Climbing
KEEP CLIMBING ADELTA
Slide 16: Non-GAAP Reconciliations
Non-GAAP Reconciliations Non-GAAP Financial Measures: We sometimes use 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. Se
Slide 17: Non-GAAP Reconciliations
Non-GAAP Reconciliations Adjusted Net Debt. We use adjusted total debt, including aircraft rent, in addition to long-term adjusted debt and capital leases, to present estimated financial obligations. We reduce adjusted debt by cash, cash equivalents and short-term investments and hedge margin receiv
Slide 18: Non-GAAP Reconciliations
Non-GAAP Reconciliations Pre-Tax Income, Adjusted. We adjust for the following items to determine pre-tax income, adjusted, for the reasons described below: MTM adjustments and settlements. MTM adjustments are defined as fair value changes recorded in periods other than the settlement period. Such f
Slide 19: Non-GAAP Reconciliations
Non-GAAP Reconciliations Free Cash Flow. We present free cash flow because management believes this metric is helpful to investors to evaluate the company's ability to generate cash that is available for use for debt service or general corporate initiatives. Adjustments include: Hedge deferrals. Dur
Slide 20: Non-GAAP Reconciliations
Non-GAAP Reconciliations Non-Fuel Unit Cost or Cost per Available Seat Mile, Including Profit Sharing ("CASM-Ex"). We adjust CASM for the following items to determine CASM-Ex, including profit sharing for the reasons described below: Aircraft fuel and related taxes. The volatility in fuel prices imp
Slide 21: Non-GAAP Reconciliations
Non-GAAP Reconciliations Capital Expenditures, Net. We present capital expenditures, net, which includes strategic investments, because management believes incorporating these amounts provides a more meaningful financial measure for investors when comparing capital spending in relation to the indust
Slide 22: Non-GAAP Reconciliations
Non-GAAP Reconciliations Operating Cash Flow, Adjusted. Delta presents adjusted operating cash flow because management believes adjusting for the following items provides a more meaningful measure for investors. Adjustments include: Hedge deferrals. During the March 2015 quarter, we effectively defe
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