Delta Air Lines, Inc. · NYSE:DAL
Delta Air Lines — Cowen and Company 9th Annual Global Transportation Conference (September 2016)
12 slides from Delta Air Lines's conference presentation, Sep 7, 2016
Slide 1: Delta – Delivering Sustainable Results
Delta – Delivering Sustainable Results Cowen and Company 9th Annual Global Transportation Conference September 7, 2016
Slide 2: Safe Harbor
2 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
Slide 3: Delta: Delivering Sustainable Results
3 Delta: Delivering Sustainable Results Delivering Solid Results Through Headwinds Focused on Returning to Positive RASM Positioning the Business for Long - Term Success • Business producing solid margins and cash flows through headwinds from operational disruption, volatile fuel prices, and unit re
Slide 4: Producing a Solid September Quarter
Producing a Solid September Quarter • The outage event and subsequent operational recovery efforts are expected to reduce Delta’s September quarter pretax income by $150 million, or ~1.5 points of operating margin • Unit revenues are now expected to decline approximately 7%, including ~1 point of pr
Slide 5: The Path To Positive PRASM
The Path To Positive PRASM Broad commercial initiatives should result in Delta being the first network carrier to return to positive unit revenue growth - an important indicator that margins and cash flows are sustainable regardless of the direction of fuel prices Domestic • Capacity growth decelera
Slide 6: Fuel Tailwind Now Behind Us
Fuel Tailwind Now Behind Us Volatile fuel environment underscores importance of unit revenue growth to achieving long - term targets • Brent prices have increased over 85% since bottoming in late January • No hedge book remaining for 2016 • Refinery provides Delta with a competitive advantage – Logi
Slide 7: Solid Cost Opportunity Pipeline
Solid Cost Opportunity Pipeline Productivity pipeline remains robust and will allow Delta to maintain non - fuel unit cost growth below 2% annually • Leading operational efficiency and reliability drives unit cost productivity • Upgauging and r efleeting initiatives will continue to deliver benefits
Slide 8: Committed to Achieving Our Long-Term Goals
Committed to Achieving Our Long - Term Goals 8 Delta’s EPS growth, ROIC, and Free Cash Flow are in the top 10% of S&P Industrials 14 - 16% Operating Margin EPS Growth ROIC Cash Flow 2013 Goals 2015 Goals 10 - 12% 10 - 15% 15% + 15% + 20 - 25% $5B+ op cash flow $7 - 8B op cash flow ; $4 - 5B FCF $7B
Slide 9: Consistently Improving Our Performance
9 Consistently Improving Our Performance Delta’s focus on its long - term financial goals has driven improved returns and de - risked the balance sheet, while allowing for increased shareholder returns Note: Delta ROIC reflects benefit of NOLs; Adjusted for special items Foundation in place to produ
Slide 10: Strong Cash Generation Differentiates Delta
Strong Cash Generation Differentiates Delta 10 Continued strong cash generation, with ~$25 billion of operating cash flow expected over the next three years Capital Expenditures & Operating Cash Flow ($B) • Strong cash generation funds investments in the future, reductions in leverage, and capital r
Slide 11: Balanced Approach to Capital Deployment
$17B ~$ 6B $4B 2009 2016E 2020 Target Balanced Approach to Capital Deployment 11 Strong free cash flow generation funds consistent shareholder returns, while also allowing for continued debt reduction Committed to Maintaining an Investment Grade Balance Sheet… ….While Returning at Least 70% of Free
Slide 12: Delta Is A Compelling Investment
Delta Is A Compelling Investment 12 Performance is consistent with high quality industrial peers, but current valuation overprices risk Note: High quality industrial transports include CHRW, CSX, EXPD, FDX, KSU, NSC, R, UNP, UPS; Adjusted for special items; Based on 2016 consensus estimates. $37 $94