Delta Air Lines, Inc. · NYSE:DAL
Delta Air Lines — Deutsche Bank Global Industrials and Materials Summit 2018
15 slides from Delta Air Lines's conference presentation, Jun 6, 2018
Slide 1: Delta: Built to Last
Delta: Built to Last Deutsche Bank Global Industrials and Materials Summit June 6, 2018
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: Delta Delivers Again in 2017
Delta Delta:Delivers Again in 2017 Built to Last A durable business model focused on customer service and reliability with sustainable financial results Running a reliable, customer-focused airline is Producing Consistent producing strong profits and cash flows that are Results sustainable through t
Slide 4: Delta Delivers Consistently Again in 2017
Delta DeliversProducing Consistently Again in 2017 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 Operating Cash Flow Returns to Shareho
Slide 5: Delta To Deliver A Solid June Quarter
Delta To Deliver A Solid June Quarter Solid demand environment producing revenue-driven earnings growth, but sharp rise in fuel price pressuring near-term results • Expecting to deliver earnings per share of $1.65 – $1.75 for the June quarter • Revenue and demand remains strong across all entities i
Slide 6: Revenue Environment Remains Strong, Fuel Price Increase Pressuring Short-term Results
Revenue Environment Remains Strong, Fuel Price Increase Pressuring Short-term Results • Delta initiatives expected to drive continued revenue benefits – Branded fares and American Express partnership each expected Delta PRASM Versus Fuel Price Change to drive an incremental $300 million of revenue i
Slide 7: Investments in Customer Experience and Operational Reliability Driving Revenue Premium
Investments in Customer Experience and Operational Reliability Driving Revenue Premium • Delta’s strong customer focus combined with investments in our fleet, network, product, and partners have driven a significant revenue premium to the industry – Top global operation – named World’s Most On-Time
Slide 8: Remain Focused on Addressing Non-Fuel Costs
Remain Focused on Addressing Non-Fuel Costs Continue to expect full year growth below 2% • June quarter non-fuel unit costs at high end of initial Year-over-Year guidance Non-Fuel Unit Cost Growth – Sequential improvement from March quarter • Back half of the year will see continued improvement 5.9%
Slide 9: Continuing Balanced Capital Allocation in 2018
Continuing Balanced Capital Allocation in 2018 Balancing cash flows between investment in business, balance sheet and shareholders Reinvest In The Business • Capital spending targets ~50% of operating cash flow • Allows for replacement of ~30% of Delta’s mainline fleet from 2017-2020 • Provides for
Slide 10: Harnessing the Power of an Investment Grade Balance Sheet
Harnessing the Power of an Investment Grade Balance Sheet Stronger balance sheet provides access to lower cost financing, more business flexibility • Provided path to $2 billion earnings-accretive accelerated pension funding Non-Operating Expense ‒ Issued unsecured debt in Mar-17 at 3.3% blended rat
Slide 11: Committed to Consistent Shareholder Returns
Committed to Consistent Shareholder Returns Target returning ~70% of free cash flow to owners • Delta has increased the dividend by 50% annually Annual Dividend since initiated in 2013 – Target returning 20-25% of free cash flow $875M through dividends over the long-term – Dividend yield ~2.2% at cu
Slide 12: America's Best Run Airline
Delta: Built to Last America’s Best Run Airline Consistent Financial Performance Setting the standard for Investment Grade financial, operational and Balance Sheet service excellence in the airline industry Investing for Delta’s Future 11
Slide 13: 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.S. (“GAAP”). Under the U.S.
Slide 14: Non-GAAP Reconciliations
Non-GAAP Reconciliations Operating Cash Flow, adjusted We adjusted operating 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 capital expenditures, debt service or general corporate initiatives.
Slide 15: Non-GAAP Reconciliations
Non-GAAP Reconciliations Non-Fuel Unit Cost or Cost per Available Seat Mile (“CASM-Ex”) We adjust CASM for the following items to determine CASM-Ex for the reasons described below: Aircraft fuel and related taxes. The volatility in fuel prices impacts the comparability of year-over-year financial pe
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