United Airlines Holdings, Inc. · NASDAQ:UAL
United Airlines — United Continental Holdings — Q1 2016 Earnings Presentation
19 slides from United Airlines's earnings presentation, Apr 21, 2016
Slide 1: 1Q 2016 Earnings Call
1Q 2016 Earnings Call United Continental Holdings, Inc. Oscar Munoz President and Chief Executive Officer Jim Compton Vice Chairman and Chief Revenue Officer Gerry Laderman SVP Finance and acting Chief Financial Officer April 21, 2016 Exhibit 99.1
Slide 2: Safe Harbor Statement
Safe Harbor Statement Certain statements included in this presentation are forward-looking and thus reflect our current expectations and beliefs with respect to certain future events and anticipated financial and operating performance. Such forward-looking statements are and will be subject to many
Slide 3: Executive Summary
Oscar Munoz President and Chief Executive Officer Executive Summary
Slide 4: Record first quarter 2016 pre-tax profit of $688M
Record first quarter 2016 pre-tax profit of $688M Achieved $1.23 diluted earnings per share1 $1.5B in share repurchases during the quarter Consolidated on-time performance 12+ pts. better and completed 3,600 more flights vs. 1Q15 Contract extensions reached with pilots, dispatchers and IAM-represent
Slide 5: Revenue and Network
Jim Compton Vice Chairman and Chief Revenue Officer Revenue and Network
Slide 6: Unit revenue headwinds persist into 2Q16
Unit revenue headwinds persist into 2Q16 PRASM drivers 1Q16 2Q16E Foreign exchange (1 pt.) (½ pt.) Surcharges (1¼ pts.) (¾ pt.) Houston and energy market (1¼ pts.) (1 pt.) Competitive pressures (1½ pts.) (1 pt.) (6.5%) - (8.5%) (3.5%) - (5.5%) (11.0%) - (13.0%) 1Q16 results 2Q16 outlook PRASM Year-o
Slide 7: Demand not keeping pace with supply growth
Demand not keeping pace with supply growth Domestic1 International2 Industry capacity and GDP indexed to 2010 100 = 2010 levels Industry capacity and GDP3 indexed to 2010 100 = 2010 levels Sources: Industry capacity represented by ASMs – OAG, GDP – IHS Global Insight 1 Domestic includes U.S. and Can
Slide 8: Shaping network strategy while addressing current challenges
Domestic Emphasizing SFO & DEN, where demand is strong, by funding growth from IAH reduction Continue slimline and upgauge initiatives to support CASM efficiency Atlantic Launched SFO-TLV, connecting two technology centers Seasonal shaping: ceased winter flights to ARN/OSL; Adding ATH/BCN/LIS for th
Slide 9: Reducing full-year capacity guidance, expect 1% to 2% growth
Reducing full-year capacity guidance, expect 1% to 2% growth 2Q16 capacity outlook Year-over-year H/(L) (0.5%) - 0.5% 0.7% - 1.7% (1.5%) - (0.5%) FY16 capacity outlook Year-over-year H/(L) 1.0% - 2.0% 1.0% - 2.0% 1.0% - 2.0% 1.0% - 2.0% 2.1% - 3.1% 1.5% - 2.5% Prior FY16 capacity outlook1 1 Source:
Slide 10: Financial Update
Gerry Laderman SVP Finance and acting Chief Financial Officer Financial Update
Slide 11: EPS of $1.23 up 28% year-over-year on tax adjusted basis
EPS of $1.23 up 28% year-over-year on tax adjusted basis $B 1Q16 1Q15 ∆ H/(L) Total revenue $8.2 $8.6 ($0.4) Fuel expense $1.2 $1.9 ($0.7) Non-fuel expense1 $6.3 $6.1 $0.2 Pre-tax earnings2 $0.7 $0.6 $0.1 Net income2 $0.4 $0.6 ($0.2) Earnings per share2 $1.23 $1.52 ($0.29) Tax adjusted EPS2,3 $1.23
Slide 12: Prices and efficiency improvement reduced 1Q16 fuel expense
Prices and efficiency improvement reduced 1Q16 fuel expense Rest of year 2016 outlook2 Percentage of consumption hedged ~12% Expected hedge loss ~$80M Downside participation ~98% 1Q16 fuel expense1 ($M) 1 Fuel expense including all losses from settled hedges. For a GAAP to non-GAAP reconciliation, s
Slide 13: Delivering sensible cost management
Delivering sensible cost management Strong cost performance driven by: Structural efficiency initiatives expected to generate $1.1B in savings in 2016 Upgauge program supports efficient growth Strong U.S. dollar provides expense tailwind Maintain FY16 CASM outlook despite ½ pt. reduction in capacity
Slide 14: Ended first quarter with unrestricted liquidity of $5.3B
Ended first quarter with unrestricted liquidity balance of $5.3B, including revolver Sustained cash generation allows balanced capital allocation Contributed ~$80M to our pension plans Expect minimal debt prepayments and ~$400M pension cash contributions Capital expenditures of ~$820M Expect capital
Slide 15: Concluding Remarks
Oscar Munoz President and Chief Executive Officer Concluding Remarks
Slide 16: Question & Answer Session
Question & Answer Session
Slide 17: Appendix A: reconciliation of GAAP to Non-GAAP financial measures
Appendix A: reconciliation of GAAP to Non-GAAP financial measures UAL evaluates its financial performance utilizing various accounting principles generally accepted in the United States of America (GAAP) and Non-GAAP financial measures, including income (loss) before income taxes excluding special i
Slide 18: Appendix A: reconciliation of GAAP to Non-GAAP financial measures (continued)
Appendix A: reconciliation of GAAP to Non-GAAP financial measures (continued) Three Months Ended March 31, (in millions, except per share data) Tax adjusted earnings per share 2016 2015 Net income $313 $508 less: Special items, net of tax 122 74 Net income, excluding special items (Non-GAAP) $435 $5
Slide 19: Appendix A: reconciliation of GAAP to Non-GAAP financial measures (continued)
Appendix A: reconciliation of GAAP to Non-GAAP financial measures (continued) Three Months Ended March 31, % (in cents) Non-Fuel CASM 2016 2015 Increase/ (Decrease) Cost per available seat mile (CASM) 12.95 13.74 (5.7) less: Special charges 0.33 0.11 NM CASM, excluding special charges 12.62 13.63 (7
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