United Airlines Holdings, Inc. · NASDAQ:UAL
United Airlines — United Continental Holdings — Q1 2019 Earnings Presentation
24 slides from United Airlines's earnings presentation, Apr 17, 2019
Slide 1: Forward-looking statements
Certain statements included in this presentation are forward-looking and thus reflect our current expectations and beliefs with respect to certain current and future events and anticipated financial and operating performance. Such forward-looking statements are and will be subject to many risks and
Slide 2: Opening Remarks
Opening Remarks Oscar Munoz Chief Executive Officer
Slide 3: More than doubled first-quarter earnings per share year-over-year
More than doubled first-quarter earnings per share year-over year Reported pre-tax earnings of $367M with a pre-tax margin of 3.8%, up 180bps versus 1Q18 Reported adjusted pre-tax earnings1 of $389M with an adjusted pre-tax margin1 of 4.1%, up more than 200bps versus 1Q18 Solid financial performance
Slide 4: On track to deliver full-year 2019 adjusted diluted EPS of $10.00 to $12.00
On track to deliver full-year 2019 adjusted diluted EPS of $10.00 to $12.00 Second consecutive quarter of adjusted pre-tax margin expansion Strong passenger unit revenue performance coupled with excellent cost management keep us on track to achieve our full-year 2019 and 2020 adjusted diluted EPS ta
Slide 5: Business Update
Business Update Scott Kirby President
Slide 6: Momentum continues into 2019
Momentum continues into 2019 Great first-quarter financial and operational results even as the company navigated some turbulence Expect to achieve peer leading pre-tax margin expansion in the first quarter Building on customer-centric initiatives Encouraged by long-term potential of loyalty program
Slide 7: Operational Update
Operational Update Greg Hart Executive Vice President and Chief Operations Officer
Slide 8: Minimized customer impact from challenging operational events
Minimized customer impact from challenging operational events Cancellations1 1Q17 1Q18 1Q19 (32%) 1Q19 D:001 AA 52.0% DL 66.7% UA WN 63.4% 69.4% 1 Mainline flights Source: masFlight Record number of departures and flown revenue passengers for a first-quarter in company history 1,576 2,664 1,811
Slide 9: Commercial Update
Commercial Update Andrew Nocella Executive Vice President and Chief Commercial Officer
Slide 10: Geographic region overview – consolidated 1Q PRASM up 1.1% year-over-year
Geographic region overview – consolidated 1Q PRASM up 1.1% year-over-year Domestic Latin Pacific Atlantic 1 Based on full-year 2Q18-1Q19 capacity. We expect second-quarter 2019 year-over-year consolidated PRASM to be up 0.5% to 2.5% % ASMs1 1Q19 YOY PRASM H/(L) Notes 57% 0.6% Strong close-in booking
Slide 11: Commercial initiatives expected to drive long term impact
Loyalty Revenue Management Commercial initiatives expected to drive long term impact Credit card acquisitions grew double digits in the first quarter of 2019 MileagePlus won best frequent flyer program award from FlyerTalk Enhancements to Gemini and our sales force efforts are expected to continue d
Slide 12: Financial Update
Financial Update Gerry Laderman Executive Vice President and Chief Financial Officer
Slide 13: First-quarter 2019 diluted earnings per share up 114% year-over-year
First-quarter 2019 diluted earnings per share up 114% year-over-year 1 Includes non-fuel operating expense and non-operating expense. $M 1Q19 1Q18 H/(L) Total revenue $9,589 $9,032 6.2% Fuel expense $2,023 $1,965 3.0% Non-fuel expense1 $7,199 $6,885 4.6% Pre-tax earnings $367 $182 101.6% Net income
Slide 14: First-quarter 2019 adjusted diluted earnings per share up 5% year-over-year
First-quarter 2019 adjusted diluted earnings per share up 135% year-over-year $M 1Q19 1Q18 H/(L) Total revenue $9,589 $9,032 6.2% Fuel expense $2,023 $1,965 3.0% Adjusted non-fuel expense1,2 $7,177 $6,890 4.2% Adjusted pre-tax earnings2 $389 $177 119.8% Adjusted net income2 $309 $141 119.1% Adjusted
Slide 15: Total CASM decreased 2.1% in first-quarter 2019
Total CASM decreased 2.1% in first-quarter 2019 Total CASM YOY H/(L) 1 Excludes special charges. While the company anticipates that it will record special charges throughout the year, at this time the Company is unable to provide an estimate of these charges with reasonable certainty. 1Q19 2Q19E1 FY
Slide 16: Non-fuel CASM decreased 1.8% in first-quarter 2019
Non-fuel CASM decreased 1.8% in first-quarter 2019 1Q19 2Q19E2 Flat – 1.0% 1 Non-fuel CASM (operating expense per available seat mile) excludes fuel, profit sharing, third-party business expenses and special charges. For a GAAP to non-GAAP reconciliation, see Appendix A. 2 While the company anticipa
Slide 17: Capital allocation and fleet update
Capital allocation and fleet update Repurchased $527M worth of shares in the first quarter of 2019 Expect FY 2019 adjusted capex of ~$4.7B1 During the quarter, took deliveries of new aircraft: four Boeing 787-10 and four Boeing 737-MAX 92 Purchased five mainline and 16 regional aircraft off-lease Ca
Slide 18: Second-quarter and full-year 2019 guidance summary
Second-quarter and full-year 2019 guidance summary 2Q19 Prior FY19 FY19 Update Capacity 3.5% - 4.5% 4.0% - 6.0% 4.0% - 5.0% PRASM 0.5% - 2.5% CASMex1,2 Flat - 1.0% Flat to better ~Flat Fuel price3 $2.13 - $2.23 Adjusted pre-tax margin4 11.0% - 13.0% Adjusted diluted EPS4 $10.00 - $12.00 $10.00 - $12
Slide 19: Second-quarter and full-year 2019 guidance summary
Second-quarter and full-year 2019 guidance summary Capacity 3.5% - 4.5% 4.0% - 5.0% PRASM 0.5% - 2.5% ‘CASMex'2 Flat - 1.0% | Flattobetter ~Flat Fuel price? $2.13 - $2.23 | SY Adjusted pre-tax margin 11.0% - 13.0% | Adjusted diluted EPS* | s10.00-812.00 $10.00 - $12.00 Aaj capes (8) —=00 “NontulCASM
Slide 20: Question & Answer Session
Question & Answer Session
Slide 21: 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 adjusted pre-tax income (loss), adjusted pre-tax marg
Slide 22: Appendix A: reconciliation of GAAP to Non-GAAP financial measures (continued)
Appendix A: reconciliation of GAAP to Non-GAAP financial measures (continued) (in millions) Three Months Ended March 31, Adjusted Non-Fuel Expense 2019 2018 Operating expenses (GAAP) $9,094 $8,770 Less: Aircraft fuel (2,023) (1,965) Add: Total nonoperating expense 128 80 Non-fuel expense 7,199 6,885
Slide 23: Appendix A: reconciliation of GAAP to Non-GAAP financial measures (continued)
Appendix A: reconciliation of GAAP to Non-GAAP financial measures (continued) CASM is a common metric used in the airline industry to measure an airline’s cost structure and efficiency. UAL reports CASM excluding special charges, third-party business expenses, fuel and profit sharing. UAL believes t
Slide 24: CASM reconciliation table
‘Cost pe vate sat mio (CASH) (GAAP) 138s 18352) Speci charge (a) oc oor “Ta party bios expenses 00s 00s Fucexpense 30 Tas) Prot shareg. led pay tates 0s 902 90 ‘CASM, exc spec charges, Prepay business expenses, an prt shang (Non GAAP) Toes 1 n ‘Consolidated CASM excusing special charges, hay busines
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