We will use the decline in fuel prices as an opportunity to accelerate progress towards our long ter

Welcome to the Delta Airlines December quarter financial results conference. At this time all participants are in a listen only mode until we conduct a question and answering session following today’s presentation. As a reminder, today’s call is being recorded. I would now like to turn the call over to Ms. Jill Sullivan Greer, Managing Director of Investor Relations.
Here in Atlanta today we have Richard Anderson our CEO, Ed Bastian our President, car rentals liberia costa rica and Paul Jacobson, our CFO, and we have the remainder of the leadership team here in the room with us for Q A. Richard will open the call, Ed will then address our financial and revenue performance, and Paul will conclude with a review of cost performance car rentals liberia costa rica and cash flows. To get in as many questions as possible during the Q A, please limit yourself to one question and a brief follow up.
Today’s discussion contains forward-looking statements that represent our beliefs or expectations about future events. All forward-looking statements involve risks and uncertainties that could cause the actual results to differ materially from the forward-looking statements. Some of the factors that may cause such differences are described in Delta’s SEC filings. car rentals liberia costa rica We’ll also discuss non-GAAP financial measures. All results exclude special items unless otherwise noted.
This morning Delta reported a $1 billion pretax profit for the December quarter with EPS of $0.77 which beat consensus of $0.75. We grew the top line 6% despite a fuel price decline of 14%. Delta expanded margins by over four points. For 2014 we generated a $4.5 billion pretax profit, an increase of 70% over 2013. Revenues grew for the full year by 7% and we expanded our operating margin by four points to 13.1%. Our ROIC was 20.7%.
We generated $5.8 billion of operating cash flow and $3.7 billion of free cash flow and returned $1.35 billion of cash to our owners. Delta was the sixth best performing stock in the S P 500 with a 79% gain. In two years we have increased our market cap by $30 billion. Our $3.7 billion of free cash flow was better than 90% of the S P Industrials and Delta has the third highest free cash flow yield of the S P Industrials.
These results include over $1 billion of profit sharing for our employees equal to more than 16% of their 2014 pay. We are proud of that at Delta and I want to thank the entire Delta team for their hard work that is the reason why we were successful in 2014. We ran the best operation in the global aviation industry with 95 days of no main line cancellations, a completion factor of 99.8% and an on time rate of 85% excluding the onetime impacts of the winter storms in 1Q of ‘14.
Remarkably, Delta had only 414 main line maintenance cancellations for all of 2014, a number that our competitors sometimes exceed in a single month. That operational excellence, along with investments we’ve made in products and services drove increases in our customer satisfaction with our domestic net promotor score increasing more than two points to 33%. High customer sat translates into a revenue premium as customers car rentals liberia costa rica have showed a willingness to pay for high quality car rentals liberia costa rica service.
For 2014 we generated car rentals liberia costa rica 107% of industry average revenues across the system and a 113% domestic RASM premium. We continually obtain efficiency and productivity which caused roughly flat non-fuel costs year-on-year in 2014. These factors combined to produce a $1.9 billion increase in our pretax profit for 2014. This profitability translated into strong cash flows which produced $6 billion of operating cash flow and allowed $2.1 billion of capital investments.
We used a portion of that to strengthen our balance sheet reducing our net debt to $7.3 billion. Our stronger balance sheet has been recognized by rating agencies as we are just two notches away from investment car rentals liberia costa rica grade. We run the company on investment grade metrics and strive to obtain investment grade ratings. car rentals liberia costa rica We are exceeding our long term shareholder commitments. Our long term op margin goal is 11% to 14%, we achieved car rentals liberia costa rica 13.1%.
EPS growth long term goal is 10% to 15%, we achieved 70% growth on a pretax basis. Our ROIC goal is 15% to 18%, we hit 20.7%. Our free cash flow goal was $3 billion, we hit $3.7 billion. We make decisions in the business for the long term. We’re focused and disciplined. We manage our capacity, car rentals liberia costa rica capital, and costs tightly. We drive high ROIC. We’re focused on growing free cash flow and raising cash shareholder returns. We believe these are the most important car rentals liberia costa rica metrics for large cap long term equity owners. Our top line growth is strong which is driven by operational and service excellence. We have increased our earnings by $3 billion since 2012 and generated $6.5 billion in free cash flow over that time. We expect to significantly improve on this performance in 2015.
There’s a tremendous car rentals liberia costa rica opportunity in front of us from lower fuel prices. We will drive these savings to the bottom line with strong revenue growth and yield preservation regardless of fuel prices. At current fuel prices, we expect to capture over $2 billion car rentals liberia costa rica in fuel savings benefit in 2015 net of our hedges. If fuel remains at these levels we are set up to fully participate in recent car rentals liberia costa rica fuel declines during 2016. In addition, our hedge book provides excellent protection should fuel rise from current levels.
We will use the decline in fuel prices as an opportunity to accelerate progress towards our long term goals. Fuel will remain volatile in 2015. We are not making any changes to our 2015 capacity plan in light of the lower fuel prices. In fact, we continue to trim capacity on the margin to maintain yields and our RASM premium. Between fuel savings and the benefits of our revenue initiatives, we expect to produce a significant pretax profit increase in 2015. These higher earnings should translate into growing free cash flow which will be allocated between strengthening the balance sheet and returning cash to our owners.
Our top priority continues to be paying down debt. We expect to have our adjusted net debt below $6 billion by the end of this year and achieve a $5 billion target next year. We will contribute car rentals liberia costa rica over $9 billion - $900 million to our pension plans this year which marks the third year of excess contributions to the plan to address that obligation. We will accelerate our capital returns to our owners with a minimum of $1.5 billion in dividends and buy backs this year. We will complete our repurchase authorization by the end of 2015, a full year ahead of schedule.
Similar to the past two years, we will update you on our capital deployment plans in May after our board of directors completes its annual strategic plan review in the spring meeting of 2015. As we discussed at our investor day last month, our work lies in continuing to build a durable industrial company with strong financial car rentals liberia costa rica performance throughout car rentals liberia costa rica the cycle. We’re making great progress. We’ve got the right people and the right strategies to continue to do so.
Delta today has the fourth lowest PE of the S P Industrials so there is much opportunity ahead. The operating environment for Delta and the overall industry in the US is remarkably good. Carbon price declines are a huge benefit to the overall US economy. In addition, the US is experiencing a pilot shortage at the regionals caused by the 1,500 hour rule and the long term hiring trends at the majors. At Delta the large size of the airline requires 12 to 18 months of advanced planning to significantly change our capacity plans. The same is true across the industry.
These jet fuel savings are enormous and we are diligent at maintaining those savings for the bottom line. In high level conceptual car rentals liberia costa rica terms at Delta, the first quarter is a good indicator of the macro trends for 2015. We expect to keep our RASM and non-fuel CASM about flat in 1Q. Capacity growth will be about 5% but just 3% net of last year’s weather. With fewer airplanes and fewer departures with revenues growing 7% fuel savings will go to the bottom line which will set up for a very strong 1Q and these trends in 1Q bode well for all of 2015.
For the December quarter our pretax income increased $474 million year-over-year to just over $1 billion. Our net income was $649 million or $0.78 per share which was generally in line with consensus of $0.77. car rentals liberia costa rica We expanded our operating margin by more than 400 basis points to 12.6%. Our results for the quarter include $262 million in profit sharing expense which brings the total for the year to $1.1 billion.
2014 was a fantastic year on all fronts and it will be an honor to be able to reward the Delta team come profit sharing day for driving industry leading operational, customer service, and financial results. These results have led Delta to be the second best performing stock in the S P 500 over the last two years. Hats off to our 80,000 strong.
We had solid revenue performance growing the top line against a back drop of significantly lower fuel prices. Passenger revenues increased 4.6% on 3.7% higher capacity. 2014 has been a strong year in corporate sales with our corporate revenues increasing 7%. We saw the strongest performance this year in the financial services, media, and automotive sectors. This corporate sales growth was a key factor in driving our New York hub to profitability.
In our most recent Ford Corporate Travel Survey, 88% of our customers anticipate increasing or at least maintaining travel spend in Q1 and over the balance of 2015. We also saw good traction with our ancillary and merchandising revenues which increased by 16% for the quarter. Our first class paid load factor car rentals liberia costa rica increased by six points to 49% and we did that off a base of 8% more first class seats than last year. Our revenues for our premium economy product comfort plus, increased by 18% and we’re now generating an annual incremental revenue stream car rentals liberia costa rica of roughly $350 million. Passenger unit revenues grew 1% with our strongest performance in the domestic entity.
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