Delta Air Lines, Inc. · NYSE:DAL
Delta Air Lines — Investor Presentation (May 2013)
16 slides from Delta Air Lines's investor presentation, May 8, 2013
Slide 1: Delta: A Balanced Approach to Capital Deployment
Delta: A Balanced Approach to Capital Deployment May 8, 2013
Slide 2: Safe Harbor
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 could
Slide 3: Balanced Approach To Capital Deployment
Balanced Approach To Capital Deployment Business Producing Strong Financial Results Disciplined Capital Investment Is Key To Success Balanced Approach To Capital Deployment 3 Delta’s financial foundation has strengthened considerably over the past five years with significant free cash flow used for
Slide 4: A Path of Significant Improvement
A Path of Significant Improvement Delta’s financial foundation has strengthened considerably over the past five years, with a solid pipeline of initiatives in place for further improvement $1.4B $2.8B 2009 2012 1.5% 11.3% 2009 2012 $17.0B $11.7B 2009 2012 Operating Cash Flow Return on Invested Capit
Slide 5: A Detailed Five-Year Planning Process
A Detailed Five-Year Planning Process With initial post-merger financial goals nearly achieved, the Board of Directors evaluated Delta’s comprehensive financial plan for the next five years •Long-term goal is to achieve sustainable, high single-digit pre-tax margins •Hold capacity growth below expec
Slide 6: Disciplined Capital Investment Is Key To Success
Disciplined Capital Investment Is Key To Success 6 Capital plan provides for ongoing investment in the business, while maintaining flexibility to adjust annual spending levels 2013 2014 2015 2016 2017 Capital Spending of $2.0 -$2.5 Billion Annually Not committed Facilities, Technology and Product Ai
Slide 7: Capital Discipline Drives Free Cash Flow
Capital Discipline Drives Free Cash Flow Capital Spending and Operating Cash Flow ($ Billion) Note: Includes pre-merger NWA Delta’s business model produces both solid financial results and significant free cash flow 1998 –2000 Cumulative earnings: $6.5 billion Cumulative free cash flow: ($2.0 billio
Slide 8: Plan For Free Cash Flow Deployment
Plan For Free Cash Flow Deployment Delta’s plan expected to generate significant free cash flow, creating up to $5 billion of value for shareholders through a combination of further debt reduction, capital return to shareholders and opportunistic pension funding 8 Debt Reduction Return to Shareholde
Slide 9: Debt Reduction Remains A Priority
Debt Reduction Remains A Priority •There is meaningful benefit to further debt reduction; new target is to achieve and maintain $7 billion of adjusted net debt •Additional debt reduction drives improvements to earnings and cash flow, while strengthening the balance sheet $17.0 $15.0 $12.9 $11.7 $10.
Slide 10: Targeting Improved Balance Sheet Metrics
2012 2017 Targeting Improved Balance Sheet Metrics •Plan targets investment grade balance sheet metrics; these metrics became the basis for company’s new $7 billion adjusted net debt target •By deriskingthe business, Delta improves its investment profile for long-term investors 2012 2017 2012 2017 F
Slide 11: Pension Liability Will Decline Over Time
Pension Liability Will Decline Over Time • Delta’s benefit pension plans are permanently frozen and closed to new participants. No additional benefits are accruing to existing plan participants. • Airline relief within the 2006 Pension Protection Act provides for both a favorable discount rate and l
Slide 12: Average Pension Funding Levels Drop Beyond 2024
$- $500 $1,000 $1,500 $2,000 2014 2016 2018 2020 2022 2024 2026 2028 2030 Required funding 5-year plan average Average Pension Funding Levels Drop Beyond 2024 •Pension Protection Act relief smoothsfunding requirements through 2024 •Funding requirements beyond 2024 still average less than current $65
Slide 13: Incremental Pension Contributions Can Address Longer-Term Pension Funding
$- $500 $1,000 2014 2016 2018 2020 2022 2024 2026 2028 2030 Required funding with addl. contributions 5-year plan average Incremental Pension Contributions Can Address Longer-Term Pension Funding •Incremental contributions of up to $1 billion over next five years would smooth remaining funding requi
Slide 14: Incremental Pension Contributions Can Address Longer-Term Pension Funding
$- $500 $1,000 2014 2016 2018 2020 2022 2024 2026 2028 2030 Required funding with addl. contributions 5-year plan average Incremental Pension Contributions Can Address Longer-Term Pension Funding •If discount rates rise to normal historical levels of 7% and incremental contributions are made, fundin
Slide 15: Implementing A Program To Return Cash To Shareholders
Implementing A Program To Return Cash To Shareholders • Delta’s Board has approved a program aimed at returning more than $1 billion over the next three years to shareholders through regular dividends and share repurchases • Demonstrates strong commitment to shareholders, while preserving flexibilit
Slide 16: Balanced Approach To Capital Deployment
Balanced Approach To Capital Deployment Business Producing Strong Financial Results Disciplined Capital Investment Is Key To Success Balanced Approach To Capital Deployment 16 Delta’s financial foundation has strengthened considerably over the past five years with significant free cash flow used for