Delta Air Lines, Inc. · NYSE:DAL
Delta Air Lines — Cowen and Company Global Transportation Conference 2015
16 slides from Delta Air Lines's conference presentation, Sep 9, 2015
Slide 1: Delta: Setting A New Standard
Delta: Setting A New Standard Cowen and Company Global Transportation Conference September 9 , 2015
Slide 2: Safe Harbor
2 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
Slide 3: Delta: Evolution Over The Past Decade
Delta: Evolution Over The Past Decade Consolidation High Quality Product Sustainable Earnings & Cash Flow • Investments in network, products, and services in addition to highly motivated employees drive Delta’s industry leading operational reliability, customer satisfaction and 15% domestic unit rev
Slide 4: Across The Board Improvement In The Business
4 Across The Board Improvement In The Business • Delta continues to deliver industry leading operational reliability and customer satisfaction • LTM 2Q15 pretax margin expanded 270bps year over year and 690bps excluding hedges • Lowered adjusted net debt by nearly $5 billion, while returning over $3
Slide 5: Managing Capacity To Best Economic Opportunities
5 Managing Capacity To Best Economic Opportunities • Leveraging network opportunities in certain markets while maintaining system capacity discipline to improve unit revenues and margins • Domestic capacity growth takes advantage of previous investments in NY, LAX, and SEA – where we now offer a sup
Slide 6: Fuel Tailwind Accelerates In Second Half 2015
6 Fuel Tailwind Accelerates In Second Half 2015 • 2H15 all - in price per gallon will be 30 - 35% lower than 1H15, while market prices will be ~15% lower • Fuel is expected to be a $9 billion expense for Delta in 2015 – $1 move in crude impacts expense by $100 million annually – At current market pr
Slide 7: September Quarter 2015 Forecast: Producing A Record September Quarter
Current Operating margin 19% - 21% Fuel Price $1.83 - $1.88 Passenger unit revenue change year over year Down 4.5% - 6.5% CASM – ex fuel change year over year 1 % System capacity change year over year Up ~3 % Note: Fuel price includes taxes, settled hedges, refinery contribution and excludes MTM adj
Slide 8: Efficient Capacity Growth, Revenue Premium, Cost Productivity
Efficient Capacity Growth • Drive capacity growth through better utilization of assets, producing more seat departures and higher capacity on a smaller fleet • Focus capacity growth on large markets in conjunction with Delta partners Revenue Premium • Investments in network, product, and service and
Slide 9: Giving Customers What They Value Drives Revenue Growth
Investments in network, product, service, and operations have already produced solid, sustainable revenue gains with more room for growth Network Product Service • Optimizing capacity to leverage hub strengths and serve high revenue markets efficiently • Refleeting and product investments increase t
Slide 10: Solid pipeline of initiatives to absorb future cost increases
Solid pipeline of initiatives is the foundation that will allow Delta to absorb future cost increases 4.6% 2.4% 0.2% - 1.1% 2012 2013 2014 YTD 2Q15 Non - Fuel Unit Cost Growth Excludes special items Solid financial plan in place to deliver second consecutive year of sub - 2% unit cost growth • Benef
Slide 11: Balanced approach to capital deployment
Reinvest In The Business • ~50% of operating cash flow to be reinvested in the business • Plan to invest $2.5 - $3 billion annually into fleet, products, facilities and technology • Allows for replacement of 20% of Delta’s mainline fleet over next 3 years Strengthen The Balance Sheet • Nearly $10 bi
Slide 12: Strong Cash Generation Funds Investment, Leverage Reduction, and Capital Returns
Strong Cash Generation Funds Investment in The Future, Reductions in Leverage, and Capital Returns to Owners • Strong operating cash flow, combined with disciplined capital spending, produces sustainable free cash flow of $4 - 5 billion annually Note: Includes pre - merger NWA; Excludes special item
Slide 13: Increasing Shareholder Returns While Strengthening The Balance Sheet
Increasing Shareholder Returns While Strengthening The Balance Sheet • Strong cash generation funds significant increase in shareholder returns, while also allowing for continued debt reduction De - Risking the Balance Sheet Driving the Business for Cash Flow • Target is to a chieve and maintain $ 4
Slide 14: Delta's Stock Has Outperformed the Industrial Peers
Delta’s Stock Has Outperformed the Industrial Peers… • Delta’s strong financial performance and balanced capital deployment strategy has driven share price appreciation well in excess of the peer group over the last several years Stock Price Performance 2013 - August 31, 2015 14 Note: High quality i
Slide 15: But Valuation Remains at a Significant Discount
• Plan targets compare favorably with other industrials and should help drive better valuations …But Valuation Remains at a Significant Discount 15 %+ 13.1% 11.5% Delta High Qual. Ind. Transports S&P Industrials EPS Growth $4 - 5B $1.4B $1.6B Delta High Qual. Ind. Transports S&P Industrials Free Cas
Slide 16: The On-Time Machine
THE ON-TIME MACHINE. ADELTA
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