Delta Air Lines, Inc. · NYSE:DAL
Delta Air Lines — J.P. Morgan Aviation, Transportation and Industrials Conference 2016
17 slides from Delta Air Lines's conference presentation, Mar 8, 2016
Slide 1: Delta – A High Quality Company
Delta – A High Quality Company JP Morgan Aviation, Transportation and Industrials Conference March 8, 2016
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: A High Quality Company
A High Quality Company Leveraging our solid foundation to produce consistent, sustainable results for shareholders Consistently • Running a reliable, customer-focused airline is producing record profits Producing Solid and returns, allowing for improved balance sheet strength and increased capital r
Slide 4: Consistently Producing Solid Results
Consistently Producing Solid Results Running a reliable, customer-focused airline is producing stronger returns, allowing for improved balance sheet strength and increased return of capital to shareholders Return on Invested Capital Adjusted Net Debt Capital Returns to Shareholders 28% $9.4B $2.6B 2
Slide 5: Producing A Record March Quarter
Producing A Record March Quarter • Unit revenue guidance reflects a stable demand environment, with capacity actions and commercial initiatives offsetting currency pressures • Lower fuel prices and cost discipline drive ~10 points of YOY margin expansion this quarter • Share repurchases include $350
Slide 6: Positioned To Grow Earnings And Cash Flow In 2016
Positioned To Grow Earnings And Cash Flow In 2016 Modest capacity growth, fuel tailwind and commercial initiatives provide Delta with solid earnings and cash flows in 2016 • Strong momentum with commercial initiatives – Expect $300 million in incremental revenues from Branded Fares 2016 Capacity vs
Slide 7: Focused on Returning to Positive RASM
Focused on Returning to Positive RASM Leveraging network and commercial initiatives to improve our unit revenue trajectory and widen our revenue premium to the industry • Targeting return to positive RASM growth this summer YOY Capacity Growth – Capacity actions will continue to help results, and st
Slide 8: Fuel Tailwind To Continue In 2016
Fuel Tailwind To Continue In 2016 Hedge book closed out, allowing for full downside participation in fuel market • Second year of lower market fuel prices contributing to more than $3 billion incremental fuel savings in Delta Jet Fuel Prices 2016 at current levels $3.07 $2.87 • Delta effectively has
Slide 9: Delta: Evolution Over The Past Decade
Delta: Evolution Over The Past Decade Through consolidation, innovation, and capital discipline, Delta is uniquely positioned among high-performing S&P industrial companies • Reallocating capacity and leveraging scale to produce better revenue efficiency Consolidation • Revenues have increased ~20%
Slide 10: A More Geographically Diverse Network
A More Geographically Diverse Network Diversifying our revenue streams to reduce economic risk and take advantage of large international opportunity 2005 Sales - ($16.2B) 2015 Sales - ($40.7B) Pacific Latin 5% Pacific 9% • Network diversification across regions reduces Delta’s 1% 9% Latin exposure t
Slide 11: Top-Line Is More Than Ticket Revenues
Top-Line Is More Than Ticket Revenues Investing in segmentation and other ancillary opportunities provides additional sources of revenue and allows Delta to capture a greater portion of the travel spend • Branded Fares is on track to drive $2.4 billion in Merchandising Service Revenue per Passenger
Slide 12: A Healthier Industry Focused On Shareholder Returns
A Healthier Industry Focused On Shareholder Returns • Capacity growth for the four largest carriers being funded by replacement aircraft and upgauging, not purchase of growth aircraft as it was in prior cycles • Industry is generating strong free cash flow and systematically returning it to owners I
Slide 13: Opportunity Ahead For Investors
Opportunity Ahead For Investors Delta’s stock represents an opportunity for investors to purchase a high-quality industrial at an attractive valuation Consistently producing high-quality …While valuations remain at a returns and cash flows… discount ROIC - 3 Year Average Forward Price to Earnings 16
Slide 14: Non-GAAP Reconciliations
Non-GAAP Reconciliations 14
Slide 15: Non-GAAP Reconciliations
Non-GAAP Reconciliations Non-GAAP Financial Measures Delta sometimes uses 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 (“GAAP”). Under the U.S. Se
Slide 16: Non-GAAP Reconciliations
Non-GAAP Reconciliations Average fuel price per gallon, adjusted The table below shows the average fuel price per gallon. Management then adjusts for MTM adjustments and settlements for the reason described below: MTM adjustments and settlements. MTM adjustments are defined as fair value changes rec
Slide 17: Non-GAAP Reconciliations
Non-GAAP Reconciliations Free Cash Flow, Three Year Average (cont.) Year Ended December 31, (in billions) 2015 2014 2013 Net cash provided by operating activities $ 7.9 $ 4.9 $ 4.5 Net cash used in investing activities (4.0) (2.5) (2.7) Adjustments: Hedge deferral 0.4 - - Hedge margin (0.8) 0.9 - Ne
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