Delta Air Lines, Inc. · NYSE:DAL
Delta Air Lines — Investor Presentation (December 2007)
22 slides from Delta Air Lines's investor presentation, Dec 4, 2007
Slide 1: Delta Air Lines - Uniquely positioned in an Evolving Industry
Delta Air Lines - Uniquely positioned in an Evolving Industry Edward H. Bastain President and Chief Financial Officer
Slide 2: Safe Harbor
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
Slide 3: Significant Momentum In Our Business
Significant Momentum In Our Business Transformation progress…•Fastest growing international carrier Best-in-class cost structure•Top-tier operational performance Award winning customer service Highly engaged workforce 1Excludes special and non-recurring items …driving substantial financial improveme
Slide 4: Momentum is Across the Business
Momentum is Across the Business 2007 vs. 2005 Unit Revenues On-Time Performance1 Mainline Non-Fuel Unit Costs Adjusted Net Debt 209.46 11.33 up 20% 3Q05 3Q07 4th 1st FY2005 YTD2007 7.05 6.50 down 10% 3Q05 3Q07 16.9 7.6 6/30/05 12/31/07 1DOT on-time ranking among network carriers 2Includes on-balance
Slide 5: Emerging As A Truly Global Carrier
Emerging As A Truly Global Carrier Realigning Capacity Toward International Growth Markets Less Reliance On Domestic Markets More Diversification Of International Capacity Domestic/International Capacity Mix (%) 100 90 80 70 60 50 40 30 20 10 0 2005 2007E 2009E International Domestic Asia, Middle-Ea
Slide 6: Fleet Flexibility Sets Delta Apart
Fleet Flexibility Sets Delta Apart International growthatmodest•13 767-400s from domestic to international growth at modest capital cost•8 777-LRs open up long-haul Asian markets•15 757 ETOPs –international gauge flexibility•10737-700s–accessintohighperformanceUpgauging 10 737700s access into high p
Slide 7: Revenue Outperformance from Executing Our Plan
Revenue Outperformance from Executing Our Plan Consolidated LOH Adj. RASM Performance 86 96 On-Track to Close RASM Gap to Industry by the end of 2008 2005 YTD 2007 ASM chg YoY DL OA(1) 3.4% 1.9% 0.1%
Slide 8: Cost Discipline is Fundamental to Leadership Position
Cost Discipline is Fundamental to Leadership PositionSepQtr2007MainlineNon-FuelCASM(¢)Sep Qtr 2007 Mainline NonFuel CASM6.46 6.50 6.52 7.59 73.80 7.86 NWA DAL LCC A
Slide 9: Business is Generating Strong Free Cash Flows
Business is Generating Strong Free Cash Flows Provides for Reinvestment While Strengthening the Balance Sheet ($M)1,500 1,000 500 0 (500) 0 (500) (1,000) (1,500) 2005 2006 2007
Slide 10: Business Plan is Working But High Fuel Costs Are A Reality
Business Plan is Working But High Fuel Costs Are A Reality Jet Fuel Prices up nearly 50% Since Beginning of the Year Jet Fuel Prices up nearly 50% Since Beginning of the Year $1.73 $2.55 1/12/07 1/26/07 2/9/07 2/23/07 3/9/07 3/23/07 4/6/07 4/20/07 5/4/07 5/18/07 6/1/07 6/15/07 6/29/07 7/13/07 7/27/0
Slide 11: Higher than Expected Fuel Prices will Dampen 4Q Results
Higher than Expected Fuel Prices will Dampen 4Q Results Guidance – December Quarter and 2007 December Quarter2007 Current Projection October 16 Guidance Current Projection October 16 Guidance Operating Margin0 - (2%)3 - 5%6%6 - 7% Fuel Price$2.60$2.36$2.20$2.15 Mainline non-fuel CASMDown 5 - 6%Down
Slide 12: Proactive Response to High Fuel Prices
Proactive Response to High Fuel Prices Domestic capacity reductions Returned 13 domestic aircraft during fourth quarter Canceling the equivalent of another 10 domestic mainline aircraft and 35 RJs worth of flying beginning in January through grounding aircraft and decreasing utilization 2008 capacit
Slide 13: Goal of Best-In-Class Operations
Goal of Best-In-Class Operations Committed to Continuous Improvement in Customer-Facing Activities DOT On-Time Ranking On-Time•Ranked #1 YTD in on-time performance among network carriers Clean•Over 80% of fleet reconditioned•Deep Clean every 29 days Clean•Over 80% of fleet reconditioned•Deep Clean e
Slide 14: Delivering Long-Term Value for Shareholders
Delivering Long-Term Value for Shareholders We are committed to increasing shareholder value running a profitable and efficient business growing revenue and margins of ancillary businesses increase investor transparency analyzing potential value of monetizing non-core assets consolidation – Board ev
Slide 15: Delta - Uniquely Positioned in an Evolving Industry
Delta –Uniquely Positioned in an Evolving Industry Opportunity to take our performance to top tier Continued unit revenue gains non-fuel unit cost reductions drive strong free cash flows Disciplined approach to domestic capacity Capacity reductions will target highest cost domestic aircraft Focusing
Slide 16: Slide 16
Slide 17: Delta Non-GAAP Reconciliations
Delta Non-GAAP Reconciliations
Slide 18: Pre-tax Income
Pre-tax Income (Combined)(Predecessor) Nine Months Ended Nine Months Ended YOY September 30, 2007 September 30, 2006 Change (in millions) Pre-tax income (loss) $1,924 $ (4,262) $6,186 Items excluded: Accounting adjustments -310 (310) Reorganization expense, net (1,215) 3,685 (4,900) Interest earned
Slide 19: Mainline Non-Fuel CASM
Mainline Non-Fuel CASM (Successor)(Predecessor) ThreeMonthsEndeddSeptember 30, 2007 September 30, 2005 Mainline CASM 10.49¢ 10.51¢ Items excluded: Delta Global Services external expenses (0.10) (0.06) Insourcing (0.26) (0.11) Mainline CASM excluding items not related to ASMs 10.13¢ 10.34¢ Mainline C
Slide 20: Adjusted Net Debt Forecast
Adjusted Net Debt Forecast(Successor)(Predecessor) December 31, 2007 June 30, 2005 in millions)Debt and capital lease obligations $8,906 $ 14,082 Plus: 7x LTM aircraft rent 1,721 4,529 Adjusted total debt$ 10,627 $ 18,611 Less: Cash and cash equivalents (2,940) (1,671) Less: Short-term investments-
Slide 21: Length-of-Haul Adjusted Passenger RASM
Length-of-Haul Adjusted Passenger RASM (Combined)(Predecessor)(Predecessor) EightTwelveTwelve Months Ended Months Ended Months Ended Aug. 31, 2007Dec. 31, 2006Dec. 31, 2005 PRASM 11.33¢ 9.31¢ Accounting Adjustment - - PRASM excluding accounting adjustment 11.33 ¢ 9.31¢ Adjustment for charter revenue
Slide 22: Cash Flow
Cash Flow (Predecessor)(Predecessor) Year EndedYear Ended (in millions)December 31, 2006December 31, 2005Net cash provided by (used in) operating activities $993 $ (307) Net cash used in (provided by) investing activities (361) 22 Adjustment: Proceeds from sale of ASA- (417) Change in Short-term Inv
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