Delta Air Lines, Inc. · NYSE:DAL
Delta Air Lines — Cowen and Company Global Transportation Conference 2014
15 slides from Delta Air Lines's conference presentation, Sep 3, 2014
Slide 1: Delta: Continuing Our Climb
Delta: Continuing Our Climb Cowen and Company Global Transportation Conference September 3, 2014
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 cou
Slide 3: Continuing Our Climb
3 Continuing Our Climb Sustaining our Momentum Setting the Foundation for Long-Term Success Balanced Capital Deployment Leveraging Delta’s strengths with initiatives to further our financial momentum and achieve long-term financial goals Building on a record setting 2013 with further earnings growth
Slide 4: Outpacing The Airline Industry
4 Outpacing The Airline Industry $3,631 $3,256 $1,742 $1,306 $770 $306 • On track to produce more than $4 billion in pre-tax income in 2014, over $1.5 billion higher than 2013 • $3 billion+ of free cash flow, adjusted net debt below $8 billion, $900 million contributed to the pension plans, and more
Slide 5: Sustaining Record Performance
5 Sustaining Record Performance September 2014 Quarter Estimate Operatingmargin 15% -16% PRASMchangeyearoveryear Up 2%-3% Fuelprice $2.90 -$2.95 CASM–exfuelchangeyearoveryear Up 0%-1% Profit sharing $350 -$400 million System capacity changeyear over year Up ~3% Note: Fuel price includes taxes, settl
Slide 6: Generating A Revenue Premium To The Industry
6 Generating A Revenue Premium To The Industry •Investments in the network, product and operations have produced solid, sustainable revenue gains, with a pipeline of initiatives in place to keep the momentum going 100% 102% 106% 106% 2010 2011 2013 YTD 2014 Delta Passenger Unit Revenue vs. A4A Avera
Slide 7: Managing The Network To Improve Profitability
7 Managing The Network To Improve Profitability Pacific – Building out Seattle gateway – Recalibrating capacity with 17% reduction in beach flying and 10% reduction in intra-Asia – Building strong partnerships in the region Atlantic – Revenue environment remains strong with this summer’s RASM impact
Slide 8: Sustaining Our Cost Performance
4.6% 3.7% 1.2% <1.0% 2012 1H13 2H13 2014E Long Term <2% Growth 8 Sustaining Our Cost Performance •Initiatives are keeping non-fuel unit costs below 2% Sustaining Our Cost Performance Non-Fuel Unit Cost Growth Excludes special items • A solid base of initiatives in 2013 established momentum for 2014
Slide 9: Domestic Fleet Restructuring
594 667 219 295 474 125 2009 2015E Small RJ Large RJ Mainline 9 Domestic Fleet Restructuring •Upgauging domestic fleet and retiring 50-seaters improves margins through higher revenues and improved cost efficiency Domestic Fleet Count 1,287 1,087 Avg gauge 102 122 • Fleet restructuring replaces small
Slide 10: Industry-Leading Fuel Strategy
$3.07 $3.03 $2.93 $2.90 -$2.95 $3.12 $3.15 $3.07 $3.00 2013 1Q14 2Q14 3Q14E Delta Industry (ex DAL) 10 Industry-Leading Fuel Strategy •Combined benefits from hedges and refinery are helping to reduce Delta’s largest expense •Hedges are estimated to provide $75 million of benefit in 3Q14 and approxim
Slide 11: Reducing Risk Across the Business
Reducing Risk Across the Business 11 •Maintaining disciplined capacity levels while generating strong earnings and returns •Diversifying the top line –nearly 20% of annual revenues are generated from non-ticket sources like ancillary products and services, cargo and third-party business services •Im
Slide 12: Debt Reduction Remains A Priority
12 Debt Reduction Remains A Priority •Debt at lowest level in 20 years; targeting $5 billion of adjusted net debt by 2016 •Debt reduction provides earnings tailwind; at $5 billion target, interest expense will be nearly $1 billion lower than 2009 Adjusted Net Debt $17.0B $15.0B $12.9B $11.7B $9.4B $
Slide 13: Increasing Shareholder Returns
13 Increasing Shareholder Returns •Demonstrating a strong commitment to shareholders with return levels moving closer to averages of high quality industrial peer set •Plan to return more than $1 billion to shareholders in 2014 Regular Dividend $300 million per year $2 billion Share Repurchase Author
Slide 14: The Path To Improved Valuation
7.2 9.8 Delta Ind. Transports •Execution of our long-term goals should help drive better valuation of our stock and compare favorably with other high quality industrial transports 14 The Path To Improved Valuation 14% Delta Ind. Transports ROIC Delta Ind. Transports EPS Growth $3.0B $1.5B Delta Ind.
Slide 15: EXPERIENCE M
EXPERIENCE M FOR A STR 5 TAILWIND,
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