Delta Air Lines, Inc. · NYSE:DAL
Delta Air Lines — Raymond James Institutional Investors Conference 2017
13 slides from Delta Air Lines's conference presentation, Mar 6, 2017
Slide 1: Delta – A Durable Business Model
Delta – A Durable Business Model Raymond James Institutional Investors Conference March 6 , 2017
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: A Durable Business Model Consistently Producing Solid Results
A Durable Business Model Consistently Producing Solid Results 2017: A Transition Year for Our Business Balanced Capital Deployment Leveraging our solid foundation to produce consistent, sustainable results for shareholders • Running a reliable, customer - focused airline is producing strong profits
Slide 4: Consistently Producing Solid Results
Consistently Producing 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 Results adjusted for special items Expect ~$6B in Pretax Profits again in 2017
Slide 5: 2017 Is A Transition Year
2017 Is A Transition Year • System capacity growth capped at 1% - appropriate level to balance capital investment and supply and demand, while also progressing toward our long - term financial targets • Committed to keeping capacity growth in check as we pursue our 17 - 19% operating margin target •
Slide 6: Margin Pressure to Peak In March Quarter
Margin Pressure to Peak In March Quarter 6 March Quarter 2017 Forecast Operating margin 10% - 11% Passenger unit revenue change year over year ~Flat Cargo and other revenue $1.4 - $1.5 Billion Fuel price $1.71 - $1.76 CASM – ex fuel, including profit sharing, change year over year Up 5.5% - 6.5% Nor
Slide 7: Revenue Outlook Remains Favorable Across Regions
Revenue Outlook Remains Favorable Across Regions 7 Commercial initiatives should result in flat PRASM in 1Q17 with trends improving through 2017 Domestic • Capacity growth moderates to +2% in 2017 • Strong business demand has continued into 1Q17, paving the way for positive RASM in 2017 • Domestic R
Slide 8: Environment Supportive of Improving Revenue
Environment Supportive of Improving Revenue Favorable dynamics in the industry environment in combination with Delta specific initiatives should drive improving revenue trends through 2017 8 Industry Environment Supportive of Improving Revenue Trends • Lag between rising fuel prices and revenue reca
Slide 9: Maintaining our Commitment on Costs
Maintaining our Commitment on Costs Delta remains committed to delivering non - fuel unit cost growth of 2% or less over the long - term 9 • 2013 - 2017 non - fuel unit cost CAGR of 2.5% includes ~50 basis points of pressure from profit sharing given robust pre - tax earnings growth • Delta expects
Slide 10: Strong Cash Generation and Disciplined Capital Investment Differentiates Delta
Strong Cash Generation and Disciplined Capital Investment Differentiates Delta Combination of strong earnings and balanced allocation of cash flow creating a sustainable business model through the cycle 10 $2.6 $3.8 $4.1 $4.8 $4.1 $2.9 $1.8 $- $2 $4 $6 $8 1997 1998 1999 2000 2001 2002 2003 CapEx Ope
Slide 11: Balance Sheet Strategy Maintains Cash Flexibility for Future
Balance Sheet Strategy Maintains Cash Flexibility for Future Debt repayment and excess pension funding strategy will provide Delta with cash flow flexibility when the company becomes a full cash tax payer 11 Debt Pension Taxes Target: $4B Adjusted N et D ebt by 2020 Target: 80% Funded by 2020 Expect
Slide 12: Delta Committed To Consistent Shareholder Returns
Delta Committed To Consistent Shareholder Returns Plan to return 70% of free cash flow to owners, with an increasing focus on the dividend 12 • Dividend represents a long - term commitment to consistently return cash to owners - Delta expects to return a greater percentage of its cash through divide
Slide 13: Opportunity In Proving Durability
Opportunity In Proving Durability 13 High quality industrial transports include CHRW, CSX, EXPD, FDX, KSU, NSC, R, UNP, UPS; Adjusted for special items; FCF Conversion is 2013 - 2016 average; Source is FactSet Implied Delta Stock Price at High Quality Industrial Transport Valuation Multiples +185% +
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